Exactly four months after Modi helped a BJP sweep in UP, Gujarat and Rajasthan in the Lok Sabha elections, the saffron party has received a set back in 33 Assembly elections
The Bharatiya Janata Party (BJP) led by Narendra Modi on Tuesday received a set back in the by-polls in 33 Assembly constituencies spread across 10 states with Congress and Samajwadi Party winning in several constituencies, especially in Uttar Pradesh and Rajasthan.
The outcome of the by-polls are seen as yet another test for Narendra Modi government’s popularity since it assumed power in May. The by-poll results are also important as BJP prepares for polls in Haryana and Maharashtra next month where it hopes to oust the Congress in these two states.
As the bypoll results poured in on Tuesday the BJP camp was subdued, while the Congress, the SP and other opposition parties lashed out at the ruling party.
"People of the state have given a befitting reply to the communal forces and have expressed intention that they need harmony and brotherhood," said Uttar Pradesh chief Minister Akhilesh Yadav in Lucknow.
"Acche din, acchi baat. Acche parinaam aa gaye (Good days are here. Good results are in)," he said in a clear dig at Prime Minister Modi for his 'Achche din' campaign slogan during the 2014 Lok Sabha polls.
In UP the SP wrested nine seats from the BJP, while the saffron party managed to retain just two. The BJP also ceded ground in Rajasthan where it lost three out of four seats to the Congress, and also in Modi's Gujarat where three out of nine seats were snatched away by the Congress.
All the seats in Gujarat were earlier held by BJP and vacated after their sitting MLAs were elected as MPs, including Prime Minister Narendra Modi, who was a three-time MLA from Maninagar.
Congress leader Sachin Pilot who is leading the fightback in Rajasthan said: "It is a huge effort by the Congress party workers and I must give credit to each and everyone especially young people."
Rajasthan BJP president Ashok Parnami said the party will examine reasons for the losses: "We will look into what were the reasons for the weaknesses and faults, and also fix responsibility.”
"The Modi magic has turned pale in India in its 100 days of being in power. People have started to express their lack of confidence in the central government given its performance in the first 100 days," Trinamool Congress leader Mukul Roy said in Kolkata.
In other results, TDP candidate T Sowmya won from Nandigama (SC) in Andhra Pradesh by about 75,000 votes, while CPI-M nominee Prabhat Chowdhury trounced his nearest Congress rival Mailafru Mog by 15,971 votes in the Manu (ST) in Tripura.
Nifty may bounce from the current levels but may suffer another round of decline
On Monday, we had mentioned that NSE's CNX Nifty has started a short downward journey and any intraday rallies will be met with selling. On Tuesday, the 50-share index opened lower and moved mostly in a range with a downward bias.
S&P BSE Sensex opened at 26,855 while Nifty opened at 8,037. Sensex moved in the range of 26,464 and 26,861 while Nifty moved between 7,925 and 8,045. Sensex closed at 26,493 (down 324 points or 1.21%) while Nifty closed at 7,933 (down 109 points or 1.36%). The NSE recorded a volume of 122.92 crore shares. India VIX rose 0.20% to close at 13.2825.
After market hours on Monday, government released the data showing India's merchandise exports registered a marginal increase of 2.35% at $26.95 billion in August 2014 over August 2013. Imports rose 2.08% at $37.79 billion in August 2014 over August 2013. Oil imports declined 14.97% at $12.83 billion in August 2014 over August 2013. Non-oil imports jumped 13.82% at $24.95 billion in August 2014 over August 2013. The trade deficit increased to $10.83 billion in August 2014, from $10.68 billion in August 2013.
The Cabinet Committee on Economic Affairs on Monday approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy. The sub sectors of capital goods covered under the scheme are mainly for machine tools, textile machinery, construction and mining machinery, and process plant machinery. The proposed scheme addresses the issue of technological depth creation in the capital goods sector, besides creating common industrial facility centres.
The gross budgetary support (GBS) from the government for the scheme would be Rs581.22 crore and the balance Rs349.74 crore would be contributed by the stakeholder industries.
The Reserve Bank of India (RBI) is limiting the country's reliance on foreign debt and will continue to do so, Governor Raghuram Rajan said on Tuesday.
The government will decide on ending government control on diesel pricing after elections in two states next month, an oil ministry source said.
Castrol India (4.23%) hit its 52-week high today, was also the top gainer in ‘A’ group on BSE. Bhushan Steel (0.90%) which is in the news with regard to the Syndicate Bank bribery case had continuously lost on the bourses from the period of 6 August 2014 to 2 September 2014. After which it has been able to make gains on each of the days except for yesterday. Today it was among the top six gainers in the ‘A’ group on the BSE.
GMR Infrastructure (10.26%) was the top loser in the ‘A’ group on the BSE. Its board of directors has considered and approved issue of equity shares by way of rights issue for an amount upto Rs1,500 crore. There is also news that US private equity firm KKR & Co LP has agreed to provide about $175 million in financing to the company in a debt and equity deal.
Dr Reddy's Lab (1.15%) today hit its 52-week high and was the top gainer in Sensex 30 pack. Hindustan Unilever (0.47%) which was among the top two gainers in the Sensex 30 pack, is in the news that it is considering using its strength of country-wide presence through its outlets to ensure consumers are delivered products directly at their doorsteps.
All the Tata group companies in the Sensex 30 stock were among the losers today. Tata Power (5.85%), Tata Steel (3.45%) were among the top two losers. Tata Motors fell 2.47%.
US indices closed Monday mostly in the negative.
Economic data showed Monday US industrial production unexpectedly declined in August for the first time in seven months as automakers slowed assembly lines.
Two-day policy meeting of Federal Open Market Committee (FOMC) meeting which ends tomorrow may give fresh guidance on US interest rates.
Except for Seoul Composite (0.35%) all the other trading Asian indices closed in the red. Shanghai Composite (1.82%) was the top loser.
Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid widening antitrust probes into multinational companies. Inbound investment was $7.2 billion in August, down 14% from a year earlier, the Ministry of Commerce said on its website today in Beijing after a 17% drop in July. It was the first back-to-back decline of more than 10% since 2009.
European indices were trading in the negative. US Futures too were trading marginally lower.
UK inflation slowed to match the least in five years in August as a supermarket price war and weather effects pushed food prices down the most in more than a decade. The rate of consumer-price growth fell to 1.5% from 1.6% in July, the Office for National Statistics said today in London.
The FIPB headed by Finance Secretary Arvind Mayaram, cleared 21 proposals for FDI out of 35, including three in the defense sector
The Foreign Investment Promotion Board (FIPB) on Tuesday cleared 21 proposals including that of Bharti Shipyard, but turned down the Sistema Shyam's request to raise foreign holding.
The FIPB, headed by Finance Secretary Arvind Mayaram, at its meeting considered 35 proposals.
The proposal of Bharti Shipyard -- an Indian company in ship building sector which has existing foreign direct investment (FDI) through foreign institutional investors (FIIs) and non-resident Indian (NRIs) -- to undertake defence activities was cleared, say reports.
Besides the proposal of Verizon Communications India, which sought approval to increase foreign equity participation by its foreign parent from 74% to 100% was also approved by the FIPB.
The board also gave a go ahead to Indusind Bank's proposal with regard to foreign investment.
The other proposals cleared by the FIPB include that of Kineco Kaman Composites India Ltd in the defence sector and ANZ Capital Ltd in the financial services sector.
However, the proposal of Sistema Shyam Teleservices Ltd (SSTL) to raise foreign stake holding in the company beyond the current 74% was rejected by the FIPB. The company has not specified the extent to which the foreign holding would be raised.
Russian conglomerate Sistema JSFC holds 56.68% in SSTL, Russian government 17.14% and 0.13% other foreign entities.