Mumbai: Following are analysts views after exit polls suggested India could be heading for a weak coalition government, with the ruling Congress-led alliance and its rivals falling short of an outright majority.
Three exit polls on Wednesday showed the ruling Congress-led coalition was slightly ahead of the opposition Hindu-nationalist alliance, but both groups were in need of smaller allies to gain a parliamentary majority.
India’s elections are notoriously hard to predict and most exit polls in the last general election in 2004 were off the mark. Official results will be released on Saturday.
Rajeev Malik, chief economist, Macquarie, Singapore:
“I wouldn’t attach too much credibility to the exit polls. But there’s clearly a lot of nervousness in the markets, also given the global backdrop.
“The positive outlier is if the final numbers are more decisive. The negative outlier would be if the left or Third Front have a chance at forming the government. Investors are going to just wait it out. It doesn’t play to be a hero in this market.”
D D Sharma, senior vice president, Aanand Rathi Securities, Mumbai:
“Looking at the polls, none of them are predicting a comfortable majority for any of the parties. In that scenario, formation of the government will have to be done with support from the Third Front, which includes the left. And going by what we have seen in the past, they do not have a very good record. It may hamper reform measures, which have to be adopted by the country at these difficult times. The market may react negatively to this. But let’s not panic. Let’s wait for the actual results.”
Deven Choksey, CEO and MD, K R Choksey Securities, Mumbai:
“First of all, these exit polls have not always been accurate, so the market will take very little cognisance of that. I think the market will wait for the actual results before moving in any particular direction. Until then we can expect volatility with a downward bias.
“Preliminary indications suggest that none of the parties have any clear majority. The market will be looking for a coalition which can provide stability and an assurance reforms process will continue.
“If the BJP-led coalition can muster more than 190 seats, it should be easier for them to form a majority with some other like-minded partners.”
Sachidanand Shukla, economist, Enam Securities, Mumbai:
Whatever indications we have it looks like the Congress-led coalition will have more than 200 seats, which is a positive for the market. If they come to power, it will ensure continuity of policies.
“Within the others (alliance led by opposition Bharatiya Janata Party) there are inherent differences in ideology, which could hinder decision making. Though the BJP is seen as pro-reforms, their alliance partners may not get along with each other.
“I think it would be easier for the Congress to form a majority, as we have seen in the past. Of course, we will have to see what kind of give and take happens with its partners.”