India’s ruling Congress party-led coalition may have won the most seats without securing enough votes to form a government, initial exit polls predicted after a marathon election ended.
Television channels began running exit polls, banned since 714 million voters began casting ballots five weeks ago, with the News X channel forecasting the Congress bloc just ahead of its chief rival headed by the Bharatiya Janata Party by 199 seats to 191, short of the 272 needed for a majority.
Headlines Today and the UTVi business channel broadcast similar figures, raising the prospect of a repeat of 1996 when the new administration collapsed after just 13 days -- at a time the economy is growing at its slowest in six years and militancy is rising in neighboring Pakistan.
“India needs a strong, stable coalition to make the good India story even better,” said Rajeev Malik, a regional economist at Macquarie Group Ltd. in Singapore. “Markets will remain nervous till a clear picture emerges on who will be in the hot seat to drive the economy.”
Early projections pointed to losses for communists in the state of West Bengal and former allies of the ruling Congress in Bihar, whose support may be needed by Prime Minister Manmohan Singh to return to power. A Third Front of smaller parties would win around 100 seats, the polls showed.
Exit polls after the 2004 election by channels including NDTV, Zee News and Aaj Tak overestimated the strength of the then governing BJP and its allies by about 50-70 seats, suggesting they would win days before being dumped from office with just 179 lawmakers in parliament.
Index Slumped
After the last elections, the Bombay Stock Exchange’s Sensitive Index plunged 11 percent on May 17, 2004, the most in more than a decade, as investors feared a government formed by Sonia Gandhi’s Congress party and communist allies would slow the pace of reforms. Trading was halted twice, wiping out $25 billion in market value in a day. The Sensex declined 1.4 percent today.
Congress, the party that has produced three prime ministers for the Nehru-Gandhi family, is battling an alliance headed by the BJP with a loose grouping of regional parties waiting in the wings should they fail to build a majority in parliament. Results will be announced on May 16.
U.S. Ally
India, a Cold War ally of the Soviet Union, moved closer to the U.S. during the administration of President George W. Bush, signing an accord that ended a ban on trade in nuclear fuel and technology imposed after India tested its first atomic bomb in 1974.
The U.S. wants Indian help in its fight against Islamic militancy in the region, especially Pakistan. Prime Minister Manmohan Singh stalled a peace process with India’s nuclear- armed neighbor following last November’s terrorist attacks in Mumbai that killed 166 people.
India says a Pakistan-based militant group, Lashkar-e-Taiba, was behind the raid that raised tensions between the two countries, which have fought three wars. Pakistan has admitted planning took place on its soil. The BJP has accused Congress of being soft on terrorism following the attack and a series of bombings in major cities.
A survey by Star News-Nielsen before the election began indicated the ruling Congress and its allies would win 203 seats in the 545-seat parliament compared with 191 for the bloc headed by the BJP.
Regional Parties
Congress, which won 145 seats in 2004, will hope to turn to regional parties for support in a bid to become the first party to be re-elected after serving a full term since Indira Gandhi won in 1971. The Communists, who withdrew support last year over the nuclear deal that they said threatened India’s sovereignty, have vowed not to back Congress this time.
The BJP, which built itself into a national power from the late 1980s with a campaign to construct a Hindu temple on the site of an ancient mosque, was ousted in 2004 despite exit polls pointing to a clear victory. Its strength fell at the last election to 138 lawmakers.
Whoever voters elect will have to bolster an economy that saw industrial production slump the most in 16 years in March as the global recession forced companies to pare output and curb investments.
Goldman Sachs Group Inc. economist Tushar Poddar predicts a re-elected Congress would expand its rural jobs program and push policies that could boost village demand for cars, telecommunications and consumer goods. A BJP-led government might increase infrastructure spending and restart a privatization program.
Slowing Growth
The International Monetary Fund expects India’s economy to grow 4.5 percent in 2009, while Reserve Bank of India governor Duvvuri Subbarao said April 21 that government stimulus and monetary easing could help expansion recover to 6 percent in the year that started April 1.
Prime Minister Singh says double-digit rates of growth are needed to improve life for the 828 million Indians the World Bank estimates live on less than $2 a day. Singh, 76, is the Congress party’s candidate for prime minister, while Lal Krishna Advani, 81, is the BJP’s pick.
Hunt For Numbers
In today’s final round of voting, a key Congress ally in the southern state of Tamil Nadu is under pressure from Jayalalitha, a former actress and potential power broker to the next administration.
The election is staggered for logistical and security reasons, with police moving around the country to prevent violence or intimidation. Despite that, Maoist rebels active in a dozen of India’s poorest states have killed police officers and polling staff in landmine and gun attacks.
Polling ended at 5 p.m. local time, and television channels were permitted by the Election Commission to begin running exit polls soon after. Pratap Bhanu Mehta, president of the New Delhi think-tank Centre for Policy Research, says Congress or the BJP will need about 140 lawmakers of their own to bring in allies from outside their respective coalitions.
If they fall short of that number, then the alliance of smaller players may be in a position to form a government with the outside support of either Congress or the BJP, Mehta said.
Mayawati, the chief minister of India’s most-populous state of Uttar Pradesh and the champion of those at the bottom of the Hindu caste hierarchy, could emerge as one of several potential candidates for prime minister. (c) Bloomberg
* Hopes of stable govt spark short covering after 2-day fall
* BSE index climbs to highest close since early October
* Some analysts guarded, await poll results on Saturday
* Reliance, banks lead gains (Updates to close)
MUMBAI, May 12 - Indian shares snapped a two-day fall and rallied 4.1 percent on Tuesday to their highest close in more than seven months as investors began betting the Bharatiya Janata Party (BJP)-led group, which is seen as market friendly, would win national elections.
Traders said the market was boosted by hopes the next government would not need the support of communists, who had stalled reforms when they allied with the ruling Congress party-led coalition for most of its five-year term.
"There is speculation that the election will result in the formation of a stable government that excludes the left," said T.S. Harihar, senior vice president at ICICI Securities.
The BJP-led group, which suffered a shock election defeat in 2004 and was trailing for weeks in the month-long elections, may now be gaining momentum against a fumbling ruling Congress party coalition thanks to some savvy alliance building. [ID:nISL443528]
Exit polls will be announced after the last round of voting ends on Wednesday and the election results are due on Saturday.
The process of coalition formation following the election results could be chaotic, Credit Suisse analyst Nilesh Jasani said in a note. "The only thing predictable in such events is the unpredictability," he said.
The 30-share BSE index <.BSESN> rose 4.07 percent, or 475.04 points, to 12,158.03, its highest close since Oct. 3. All but one of its components advanced, after choppy trading through the first half of the session, with the benchmark falling as much as 0.5 percent at one stage.
Energy giant Reliance Industries
The BSE index, which had fallen more than 3.5 percent in the previous two sessions, has jumped 51 percent since hitting a 2009 low in early March and is up 26 percent this year after slumping 52 percent in 2008.
Analysts said the market would likely see more volatility when exit polls are released.
"Short-term investors will trade on the exit polls. Those with a longer-term view will wait for the actual results to come out," Anand Shah, head of equities at Canara Robeco Mutual Fund, said.
Traders said investors shrugged off weak economic data.
Industrial output fell at its steepest annual pace in at least 14 years in March, leaving the door open for further interest rate cuts by the central bank.
Factory output in March fell 2.3 percent from a year earlier, the third fall in the past four months and much sharper than market expectations of a 0.5 percent decline. [ID:nDEL155586]
Analysts said the economy was still set for recovery from late 2009.
"We still believe the economy is set for a rebound in the second half of the 2009/10 fiscal year due to fundamental reasons such as fiscal stimulus packages, monetary actions, extra oil and gas output later this year and falling commodity prices and robust domestic demand, " said Robert Prior-Wandesforde, Senior Asian Economist at HSBC in Singapore.
Reliance Industries, which has the biggest weight in the main index, rose 5.3 percent to 1,958.30 rupees, its best close in almost 7-½ months.
Private-sector lender ICICI Bank gained 6.7 percent to 558.65 rupees, while rival HDFC Bank climbed 3.9 percent to 1,189.70 rupees. Government-run State Bank of India advanced 2.8 percent to 1,295.45 rupees.
No. 2 outsourcer Infosys rose 5.5 percent to 1,597.95 rupees. In the broader section, gainers led losers 1,410 to 1,106 on relatively moderate volume of 423 million shares.
The 50-share NSE index <.NSEI> rose 3.6 percent to 3,681.10.
MAIN TOP 3 BY VOLUME
* Unitech
* Suzlon Energy
* HDIL
STOCKS THAT MOVED
* Motilal Oswal Financial Services Ltd
* United Breweries
The curtains came down on the staggered Lok Sabha elections on Wednesday with millions of Indians voting peacefully in the fifth and last round covering 86 constituencies, and the first exit polls putting the Congress-led coalition on top of a fractured verdict.
Even as both the Congress and the Bharatiya Janata Party (BJP) claimed they would finish as the number one, an India TV exit poll telecast after balloting ended said the Congress-led United Progressive Alliance (UPA) could end up with 195-201 seats in the 545-member Lok Sabha.
This tally could go up to 227-237 if the seats bagged by estranged allies such as Rashtriya Janata Dal and Samajwadi Party were to be included. The BJP-led National Democratic Alliance (NDA) was tipped to bag 189-195 seats and the Third Front 113-121 seats, it said.
But political leaders and analysts kept their fingers tightly crossed, with the expected cliffhanger verdict forcing both the Congress and BJP -- the two main contenders for power -- desperately scouting for new allies. As the voting progressed, some parties switched loyalties, making it one of the most difficult electoral battles to predict.
"It seems to be a very complex political situation. It is the complexity that makes it difficult to make any predictions," Kerala-based political analyst N.P. Chekutty told IANS, reflecting an opinion widely held in the world's largest democracy.
Election officials estimated that some 55 percent of the 714 million electorate - which is more than the combined population of Russia and the US - had voted over five phases starting April 16. The result will be known Saturday.
Wednesday's polling was overwhelmingly peaceful but for the murder of a political worker in Tamil Nadu and clashes in Tamil Nadu and West Bengal, two key states whose outcome will have a bearing on government formation in New Delhi.
The exercise involved all 39 seats of Tamil Nadu, all four seats of Himachal Pradesh and all five seats of Uttarakhand besides two in Jammu and Kashmir, nine in Punjab, 11 in West Bengal and 14 in Uttar Pradesh besides one each in Chandigarh and Pondicherry.
The most notable of the 1,432 candidates included Home Minister P. Chidambaram of the Congress (Sivaganga, Tamil Nadu) and Trinamool Congress chief Mamata Banerjee (South Kolkata).
Fearing uncertain times, Indian markets turned edgy Wednesday, with a key index losing 138 points from its last closing figure at end of trade. The 30-scrip sensitive index of the Bombay Stock Exchange opened at 12,201.93 points and fell 138.38 points or 1.14 percent from Tuesday's close.
"I'm fully confident that a BJP-led government will be formed at the centre. We will get new partners (after the polls)," BJP president Rajnath Singh said confidently. Within hours, Congress general secretary Digvijay Singh asserted that his party would occupy the number one slot.
Not to be left behind, the Third Front - made up of the Communists and regional parties - announced they would meet in New Delhi Monday to decide the future course of action. The meeting would be attended by the Bahujan Samaj Party (BSP), which is widely expected to win around 40 seats, said Prakash Karat, general secretary of the Communist Party of India-Marxist (CPI-M) and a key mover behind the Third Front.
With neither the UPA nor NDA expected to cross the magic figure of 272 in the Lok Sabha, the Congress and BJP tried to outsmart one another in order to woo leaders of smaller and regional parties.
AIADMK chief and former Tamil Nadu chief minister J. Jayalalitha, a key Third Front partner, said in Chennai: "There are feelers from many places. I am not responding to them now. Everything depends on the results. If the results are as expected, then I will go to Delhi."
Congress president Sonia Gandhi, who in 2004 pulled off a coup by most unexpectedly worsting the BJP-led alliance in general elections, Wednesday telephoned estranged ally Ram Vilas Paswan after a fire in his house which adjoins her own in the heart of New Delhi.
Elections to the 15th Lok Sabha got off to a violent start April 16 leaving 19 people dead in coordinated attacks by Maoist guerrillas during the first round of balloting. The rest of the polling days were, however, largely peaceful.
The long wait for millions of people across India and the desperate moments for Indian TV channels will finally end today after 5 PM. The fifth and final phase of voting is being held in 86 Lok Sabha seats across 7 States and 2 UTs today. Once the polls are over at 5 PM, all major news channels will be busy in telecasting the exit poll results.
The Election Commission had put a ban on all Exit Polls in the country till the final phase elections are over. The Indian News Channels as well as the common people had a long wait to discuss the exit poll results. The 2009 Lok Sabha elections, which began on April 16, will come to an end today. Counting will take place on May 16.
Major News Channels in India such as CNN-IBN, TimesNOW, Star News, Aaj Tak, India TV and NDTV India are all set to telecast the exit polls today, based on their own permutations and combinations. A few weeks ago, all opinion polls had predicted a close fight between the Congress-led UPA and BJP-led NDA. They also gave a slight edge to the UPA. However, the Exit Poll results may come up with many surprises.
The Congress-led UPA has been projected to have an edge over NDA and others in the Lok Sabha elections which are expected to produce a highly-fractured verdict, exit polls on television news channels show.
The results of the surveys, shown by the channels at the end of the fifth and final phase of polling in the month-long exercise, have placed the BJP-led NDA not very far behind the UPA and the Third Front at a little over 100 seats.
'Headlines Today' channel gave Congress and its allies 191 seats against 180 to BJP and its allies. The Left parties, which played a crucial role in the outgoing Lok Sabha with 60 seats, has been projected to get 38 while 'Others' including the BSP are set to get 134 in a House of 543.
In its projections, 'India TV' channel said UPA would get between 195 seats and it could go up to 227 if 32 seats of RJD, LJP and SP are added. The channel has given NDA 189 and the Third Front 113. 'Others' are projected to get 14 seats.
Exit polls had been way off the mark in 2004 Lok Sabha polls, with most of them projecting BJP-led NDA as the winner which did not turn out to be correct.
Ultimately, in 2004 elections the Congress and its pre-poll allies got 216 seats against a projection ranging from 170 to 205 seats. The BJP-led NDA had secured 187 seats against the projections of over 240 to 250 seats.
Tamil Nadu Chief Minister M Karunanidhi and former Chief Minister Jayalalithaa cast their votes in Chennai for Lok Sabha elections on Wednesday.
Indian Prime Minister Manmohan Singh asked the people of India to assess whether going by its track record Bharatiya Janata Party is capable of forming a decisive and strong...