Samāchāra Sanchika - 4th Jun'24

1. In the 543-seat Lok Sabha, the BJP is projected to win around 240 seats, a significant drop from their previous 303 seats. The NDA alliance is expected to secure 290-295 seats, while the opposition INDIA bloc is anticipated to gain around 235 seats.

My Take: The Indian election results have delivered a surprising twist, defying all exit poll predictions. The BJP is set to lose around 60 seats from their 2019 tally, marking a significant setback for Modi and his popularity. Since 2014, India has enjoyed single-party majorities for two consecutive elections, but the 2024 results have shifted the political landscape back to coalition governance. Although the NDA comfortably surpasses the 272-seat halfway mark, it will be challenging for Modi and the BJP to implement all their desired reforms. The opposition is poised to play a crucial role in the new political dynamic.

Life has come full circle for TDP and N. Chandrababu Naidu (CBN), allies of the BJP and part of the NDA. The TDP-JS-BJP alliance has decimated Jagan's YSRCP in both assembly and parliamentary elections. With 16 MPs, CBN will play a key role in government formation at the center and could become a kingmaker.

- Three states that surprised the BJP are UP, West Bengal, and Rajasthan.
-Meanwhile, the BJP has opened its account in Kerala and is winning in Odisha and Telangana, slowly increasing its presence in the South of Vindhyas.
- SP in UP, TMC in West Bengal, and the SS-NCP alliance in Maharashtra have either improved or held their ground firmly against the BJP.
- Additionally, Congress has increased its tally to around 100 seats, winning 8 seats in UP.

In my May 31st column, I predicted the BJP would lose around 20-25 seats, but they are losing around 60 seats. Is this the downfall of Modi's BJP? Will there be a reorganization within the BJP? Was there a rift between Yogi and the BJP high command? It will be interesting to see if the INDI Alliance can poach some NDA parties and claim the majority.

2. Closing Bell: Sensex plunges 4,390 pts, Nifty below 22,000 as landslide eludes NDA

My Take: The stock markets reacted sharply as the Sensex plunged by 4,390 points and the Nifty fell below the 22,000 mark, following election results that showed the NDA missing a landslide victory. The unexpected loss of seats by the BJP, which marked a significant setback for Prime Minister Modi's government, has led to market uncertainty. Investors are wary of the return to coalition politics, which could complicate policy implementation and economic reforms. This steep decline in the markets underscores the concerns over political stability and future economic direction under the new government setup.

My biggest concern is whether exit polls should be conducted when the counting is three days after the last phase of elections. The exit polls all projected a landslide victory for the BJP and NDA, causing the markets to surge by 3,000 points the following day in anticipation of a comfortable majority for the BJP. This sudden spike now seems like a pump-and-dump activity, leading to significant financial losses for investors within a span of 24 hours. Such volatility raises questions about the reliability and impact of exit polls on market stability. It underscores the need for regulatory scrutiny to protect investors from abrupt market manipulations driven by speculative forecasts.