View on Bihar Election Results | Stocks and Commodities

November 5, 2015
Time: 8 pm

View on Bihar Election Results:

1. Markets have been falling every day for the last many days and people say it is because of Bihar election.
2. Let us look at the facts, why Bihar election is important?
3. People think that if BJP wins, it will be in a better position to push the GST bill.
4. But I do not think that is true. Even now BJP has won a number of state elections after the Lok Sabha elections but what matters in the Parliament is the numbers.
5. In Rajya Sabha, BJP does not have the numbers and that is why it could not pass the GST bill.
6. That is not going to change even if BJP wins Bihar.
7. Some people argue that if BJP wins then its tally in Rajya Sabha will go up.
8. Even this argument is totally wrong.
9. Much before elctions, we all know that Nitish has formed a strong coalition and hence whoever wins, the margin is going to be very narrow.
10. That is what even the exit polls show.
11. There are only 16 Rajya Sabha MPs from Bihar, so the winning party may get 9 and the loosing party may get 7.
12. So the difference between winning and loosing is just a matter of 2 Rajya Sabha MPs which is not a big deal.
13. Even this also not an immediate effect, the term of the current MPs from Bihar ends only in 2018 and these new Bihar MLAs will elect the new MPs only in 2018.
14. Having two more or two less MPs in a Rajya Sabha that too in 2018, what difference it is going to make in passing GST?
15. Are the markets taking such a long view?
16. I do not think so, so it is all about sentiment, short selling, US rate hike and poor corporate results that matters now not the Bihar election.
17. So if Markets correct, if Nifty falls below 7800, that will be a good opportunity for long term investors to enter the market.
18. Corporate results will pick up in next two to three quarters and in one to two year time horizon markets will give much better return and this year markets have given negative return.