The NC-Congress alliance has crossed the halfway mark and was leading on 48 seats, as per early trends.
Statistics by the Election Commission of India indicate that the NC was leading in 40 and the Congress in eight seats.
While the BJP was leading in 23 Assembly seats, the PDP was ahead on three seats and others in nine seats.
The NC-Congress fought the Assembly polls in alliance with the NC fielding 52 and Congress 31 candidates.
Former chief minister and NC vice president Omar Abdullah was leading in both Ganderbal and Budgam seats.
However, Iltija Mufti, the PDP candidate and daughter of former chief minister, Mehbooba Mufti, was trailing.
J&K after fresh delimitation of Assembly constituencies has 90 seats out of which nine are ST and seven SC seats.
The counting of votes for all 90 Assembly seats began at 8.00 a.m.
The political fate of 873 candidates, including senior leaders of the National Conference (NC), BJP, Congress, Peoples Democratic Party (PDP), People's ConferenceC, Apni Party, CPI(M), Awami Ittehad Party (AIP) and Independent candidates will be decided.
Chief electoral officer P.K. Pole told reporters that 28 counting centres have been set up across Jammu and Kashmir for counting votes. Postal votes will be counted first.
Lt Governor Manoj Sinha will nominate five members to the Assembly on the Ministry of Home Affairs' recommendations.
Among these five, two will be women, two Migrant Kashmiri Pandits, one of whom should be a woman, and one representative of the West Pakistan refugees.
Exit Polls have put the NC-Congress alliance in a strong position with the regional party getting the lion's share of the seats. BJP is expected to slightly improve on its tally of 25 seats which it had won in the 2014 polls while the PDP, which had won 28 seats in the 2014 polls, is predicted to win less than 10 seats this time by the Exit Polls.
This will be the first elected government to be formed in Jammu and Kashmir post abrogation of Article 370.
The just concluded legislative Assembly election recorded a voter turnout of 63.45 per cent which is less than the 65.52 per cent recorded in the 2014 Assembly elections.
The Assembly poll was held in three phases on September 18, September 25 and October 1. In the first phase, 24 seats went to the poll, in the second phase, 26 and in the third phase, 40 seats went to the poll.
(With inputs from IANS)
