India's Bihar elections a major turning point

With the ruling NDA coalition facing the prospects of a complete rout in the Bihar state elections, it is almost certain that the repercussions will felt more predominantly on India's immediate investment climate. Most likely, the benchmark indices are likely to open on Monday, November 9 with heightened fears on the direction of future economics reforms perhaps resulting in a free-fall of market capitalization across the board. In the immediate future, this is likely to lead to an upward revision in the market-risk premium. More than anything else, this defeat will severely mute the ability of the Modi-led government to push through crucial legislation including GST critical for economic acceleration. Besides, the souring optimism that India may gain at China's cost with the latter experience a stagnant growth may be very difficult to materialize, if not impossible!