India's ruling Bharatiya Janata Party (BJP) has rejected exit polls which suggest strong gains for the opposition after the latest round of voting.
BJP supporters have been confident of success
Senior BJP leaders said the coalition was still on course for a comfortable majority in the general election.
But in what correspondents say is a sign of nervousness, BJP President Venkaiah Naidu made a new appeal for voters to give their backing.
The polls have indicated between 235 and 279 seats for the ruling alliance.
Exit polls criticised
"The voting is in tune with expectations and the party is ahead of all others, even by the worst exit poll predictions," Mr Naidu said.
The government's supporters say that exit polls in India are notoriously unreliable - the same point made by the main opposition Congress Party when earlier polls showed it lagging.
Speaking while campaigning in the politically crucial northern state of Uttar Pradesh, Prime Minister Atal Behari Vajpayee said that he did not know what the outcome of the vote would be.
Mr Vajpayee said that he had already been congratulated by people who thought that he had won the election on the basis of exit poll findings.
"They may be a method of analysing voters' sentiments," he said, "but we will not know the real results until May."
Yet the possibility of the governing National Democratic Alliance (NDA) not winning an overall majority did hit the Bombay share index, which was down by over 3% on close of trading on Tuesday. The index recorded its biggest fall in 37 months.
"Before the elections no-one talked about a hung parliament. It was just not expected, and now suddenly that appears to be the trend. This triggered a panic reaction," said a trader.
Senior BJP leaders have reviewed the party's performance in the second main phase of elections, mainly in the key northern states of Uttar Pradesh and Bihar.
The latest polls indicate between 235 and 279 seats for the BJP and its 22-party alliance and between 160 and 210 seats for Congress and its allies.
They also show regional parties faring well in some parts of the country - the Samajwadi Party in the populous Uttar Pradesh state, for example.
Indian newspapers have been circumspect about the prospects of the BJP-led alliance after the latest round of polling.
"NDA may touch, or have to go," headlined the Hindustan Times.
The Hindu and the Indian Express newspapers said that the latest round of polls pointed to a "hung" parliament.
The Times of India said that "even if the Congress surge has raised some questions about NDA getting a clear majority, the ruling coalition remains the firm favourite to form the next government".
Meanwhile, leaders of the BJP and Congress, stepped up their campaigning ahead of the next phase of polling on 5 May.
Congress leader Sonia Gandhi has addressed a number of public meetings in northern Rajasthan state. All the 25 seats in the state are polling in the next phase.
Polling has been staggered over four main stages, with another two to be held in the coming weeks.
There were at least two outbreaks of election related violence on Tuesday: up to eight people were injured in clashes in the southern state of Andhra Pradesh, and in Indian-administered Kashmir the former central government minister, Maqbool Dar, escaped a hand grenade attack while touring his constituency.
Both the BJP and Congress are now campaigning earnestly in advance of the next two rounds of voting in May.
The BJP says that a booming economy and recent peace overtures with Pakistan have contributed to the sense of well-being in the country.
But the opposition says that many people in rural areas still live in poverty, and that the fledgling peace process has brought few long-term benefits.