Mint Quick Edit: Stock market jitters: Over-bearish on a coalition government?
India’s stock market tumbled on Tuesday as Lok Sabha election results showed the ruling National Democratic Alliance (NDA) led by the Bharatiya Janata Party (BJP) underperforming exit-poll predictions. The S&P BSE Sensex closed 5.7% lower, having fallen as much as 8.2% in intraday trade.
Some of this betrayed panic that the BJP’s grip on power would loosen considerably enough to hit the stability of economic policy. Yet, as results kept trickling in after stock-trading ended, market fears seemed overblown.
What’s expected now is a coalition government of the NDA, led by the BJP, most likely with Narendra Modi as a third-time prime minister. The loyalty of allies Telugu Desam Party and Janata Dal-United may seem fickle, but let’s not forget that the economy need not suffer under a regime that could, on paper, come apart mid-way.
The logic of a common minimum programme is usually good for economic reforms, as the all-round gains of fast growth are so obvious. If India’s new coalition focuses on the economy’s emergence, bears could turn bullish again.
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