Modi Set to Retain Grip on Home State After Bellwether Vote

Gold Silver Reports – Indian Prime Minister Narendra Modi’s party is set to return to power in his home state, an election that’s considered a bellwether before the national vote in early 2019. Stocks erased the day’s losses.

The Bharatiya Janata Party was leading in 98 seats in the 182-seat Gujarat legislature as of 11:15 a.m. local time, according to early trends from the Election Commission of India, more than the 92 needed for a majority though less than the 115 it won in the previous election. The main opposition Congress party was ahead in 73 seats, which would be its best showing in more than two decades.

A narrower victory may prompt Modi to resort to populist spending to boost support before he faces re-election in early 2019. That risks widening India’s already bloated budget deficit and pressure the battered bond market. The main stock index — which had slumped as much as 2.6 percent earlier Monday while Modi’s party was trailing — recovered to gain 0.7 percent.

The BJP has held Gujarat for about two decades with Modi at the helm for more than 12 years. He used his stewardship of Gujarat as a launchpad for his national campaign in 2014, pledging business-friendly policies and development for all.

However, last year’s ban on high-value currency notes and this year’s chaotic roll out of the goods and services tax has hit traders and textile workers in Gujarat. The Congress party, which had been written off earlier in the year, found its voice and attacked the administration as a “government for the rich.”

“A few months ago, the market believed that the state election in Gujarat was a non-event with a foregone conclusion,” analysts at CLSA led by Mumbai-based Mahesh Nandurkar wrote in a report on Thursday. “But the changes in the political scenario over the last few months have turned the election into an event.”

The BJP also seemed poised to wrest the small Himalayan state of Himachal Pradesh from the Congress, according to the Election Commission’s early trends. – Neal Bhai Reports

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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