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Nomura: BJP government with Narendra Modi at helm will be good for markets

NEW DELHI: Given BJP's Prime Ministerial candidate Narendra Modi's track record of an impressive performance on the economic front, a BJP government at the centre in 2014 will be good for market sentiment, believes Alastair Newton, Senior Political Analyst at Nomura.
However, Newton admitted to the problems of a coalition government in India, stating that it is difficult to push structural reforms. "The caste-based and regional interests of some parties serve as a hindrance," he opined.
In an interview with ET Now, Newton said that the state elections will be a litmus test for all political parties, especially the BJP. "The state elections results will be important to BJP and its Prime Ministerial candidate Narendra Modi," Newton said.
"A good solid performance by BJP will help give them a good platform to move forward to general elections," he opined. According to Newton, BJP is likely to retain its governments in the states of Chhattisgarh and Madhya Pradesh. "The big question however is whether BJP will be able to win back Rajasthan," he said.
In September 2013, Christopher Wood, Chief Equity Strategist at CLSA had also said that the Indian stock market's greatest hope is the emergence of Narendra Modi. "Amidst all these negatives, the one potential positive is that the gathering macroeconomic crisis could trigger an improvement in governance. The Indian stock market's greatest hope in this respect is the emergence of Gujarat chief minister Narendra Modi as the BJP's prime ministerial candidate," Wood had said.
"While the odds are definitely stacked against him, our view is the worse the sense of crisis the better Modi's chance of winning. Modi is certainly raising the rhetorical level with his growing public attacks on a direction-less government and focus on the collapsing rupee," Wood opined.
Considered a semi-final before the Lok Sabha polls, assembly elections in Madhya Pradesh, Rajasthan, Delhi and Mizoram will be held in a single phase between November 25 and December 4, while it will be two- phased in Chhattisgarh on November 11 and 19.
Counting of votes in all the states will be on December 8, Chief Election Commissioner V S Sampath said last week.
While Madhya Pradesh will go to polls on November 25 to elect its 230-member assembly, elections for the 200-member Rajasthan assembly will be held on December 1. Assembly polls in Delhi with 70 constituencies and Mizoram with 40 seats will be held on December 4.
The Election Commission has also decided to hold bye- elections to the Surat (West) assembly constituency in Gujarat and Yercaud assembly seat in Tamil Nadu on December 4.
A total of 630 assembly constituencies in five states will go to polls in which a total of 11.60 crore voters are likely to exercise their franchise.
(With inputs from PTI)
source:- economictimes
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