Investors who typically invest in stocks for the medium to long term always look at political stability. With the Sensex at near 34,000 points, the markets have probably factored a BJP win in 2019.
Very difficult to replicate 2014
The BJP won 7 out 7 parliamentary seats in Delhi, 26 out of 26 in Gujarat, 25 out of 25 in Rajasthan, 5 out of 5 in Uttarakhand, 2 out of 2 in Goa, 27 out of 29 in MP, 73 out of 84 in UP (with all), 10 out of 11 in Chattisgarh and so on. In Maharashtra with ally Shiv Sena it won almost 41 out of the 48 seats. The story is same in several other states including Punjab and Haryana.
Most of these are either perfect scores or marginally less. It is almost certain that you cannot beat a 100 per cent score and you are only going to drop. If the drop comes, you would have to make-up seats.
The question is from where? The BJP can make-up probably in Tamil Nadu, Bengal, Odisha and Kerala. We all know how difficult it would be for the BJP to make reasonable headway here. Kerala and Bengal maybe with 1 or 2 seats extra, while in Odisha maybe a little more.
So, overall, chances of losing seats is almost a given, especially where you have acquired 100 per cent seats or near 100 per cent in 2014.
Problem with allies
Another problem for the BJP is allies. Shiv Sena, which won as many as 18 seats in Maharastra in an alliance with the BJP has decided to go it alone. The TDP alliance in Andhra is in bad shape with the TDP pulling out ministers from the central government.
In Punjab the Shiromani Akali Dal has taken a drubbing in the recent elections in Punjab. In Bihar, The Hindustan Awam Morcha (HAM), led by a former chief minister and Dalit leader Jitan Ram Manjhi, has quit the BJP-led National Democratic Alliance.
There are very few partners the BJP can look forward to at the moment.
SP-BSP likely alliance a nightmare
If the SP-BJP enter into an alliance for the Lok Sabha polls, it could spell trouble for Modi's re-election bid. Social and caste factors still matter and a classic example is the recent bye-elections, which the BJP lost in Gorakhphur and Phulpur. In both seats the SP and BSP had entered into an understanding, whereby the BSP lent support to the SP. Remember, 84 seats would be up for grabs in UP In 2019, which has the largest share.
The BJP also fared badly and has also lost bye-elections in Rajasthan and Punjab. In fact, the BJP which won as many as 282 seats in 2014, has now dropped to 271, after bye- elections.
We all know what happened when Vajpayee sought a re-election bid in 2004, where it was almost certain he would romp-home. The problem right now is that rural folk are unhappy. Huge rally by farmers in Maharashtra recently, could well tell us what is brewing. Will the rural distress be the downfall for the BJP in 2019? Difficult to predict, though stock market investors must be careful with 1-year to go before the elections.