Stock market gung-ho on BJP’s UP show, ignores criticism of role in Goa, Manipur

Report by: 
Rabindra Nath Sinha
Kolkata
14 Mar 2017

The investor community today a gave a thumbs-up to the BJP for its stellar performance in the UP Assembly elections, ignoring the  flak it had to take from the Opposition  for its efforts to engineer majority for ministry-making in Goa and Manipur despite its being behind the Congress in winning seats.

The BSE index opened 500 plus points higher and at one stage soon after rose 615.70 points.  At the NSE, the index   at one stage in the early hours of trading surpassed the 9,100-mark to hit 9,122.75. The strong undertone persisted throughout the trading hours and despite the usual profit-taking, the BSE and NSE indices were up 496.40 points and 152.45 points respectively or 1.71 per cent in both cases. The main reasons for stock markets to react the way they did were:  the results in UP have further strengthened the position of Prime Minister Narendra Modi politically ;  he may be safely expected to the carry forward the reform process with vigour;  he will also be free to initiate pro-business measures; the BJP will greatly overcome its limitations in the  Rajya Sabha  and the first opportunity to strengthen its position in the Upper House will come its way in 2018 when 10 vacancies will occur  and finally  the party will have a definite edge in the election of the next President.

Market stakeholders agree while his enhanced stature and political authority will make his job relatively easy, he has to reckon with the reality of tardy job generation and  accumulating problems of farmers. The stamp of his authority (and that of party chief Amit Shah) will be in evidence in the near future when he carries out a reshuffle of the ministry. He will have to find a competent person to head the defence ministry. Also, he will have to decide whether to retain Sushma Swaraj, who is not keeping good health, as the external affairs minister. It will be a difficult political decision.