Historical precedents loom large: the Nifty tumbled 6% in a single day after 2024’s unexpected post-poll results, as investors scrambled to reprice the risk of a fragmented coalition. This time, the stakes are compounded by Bihar’s razor-thin margins: a modest 3–6% swing among EBC and youth voters across 100 marginal seats could cost the NDA up to 60 seats—collapsing its stronghold and paving the way for a Naidu–Nitish–Shinde alliance.
Financial markets, highly sensitive to clarity on fiscal and reform policies, are expected to react swiftly to even the semblance of government instability. “Coalition ambiguity translates into policy uncertainty, perceived fiscal laxity, and a risk-off mood for both foreign and domestic investors,” said Pratyush Kamal of Incred Research. The immediate fallout could include foreign outflows, a spike in bond yields, and sustained pressure on the rupee—until the new government’s economic roadmap becomes clear.
However, strategists caution that the market reaction is likely to be transitory. If the incoming coalition quickly establishes a credible economic agenda—prioritising infrastructure investment, macro stability, and fiscal discipline—equities may rebound as policy certainty returns. Historically, India’s markets have rewarded decisive leadership regardless of the coalition’s composition, with recovery following the restoration of governance visibility.
Sectorally, defence, public sector, and infrastructure-related stocks may lose momentum on fears of decentralisation and leadership churn. In contrast, consumption, regional banks, and SME-linked equities could outperform amid expectations of a more regionally focused fiscal orientation and broader social spending.
For seasoned investors, any sharp correction could present a cyclical accumulation opportunity—provided policy signals remain market-friendly. “It’s not who governs, but how they govern post-transition that will dictate where Nifty settles,” said a senior fund manager.The threat of NDA’s downfall, therefore, is likely to spark a short-lived but sharp correction in Indian equity markets as investors rush to price in uncertainty—a “coalition discount.” The medium- to long-term trajectory, however, will depend less on coalition arithmetic and more on the credibility and consistency of the government’s fiscal and reform agenda that follows.Early signs from exit polls predict a clear NDA victory and a setback for the Congress-RJD alliance. Multiple surveys released on Tuesday evening predicted a strong victory for the NDA, led by the BJP and JD(U), while the opposition Mahagathbandhan (MGB) is projected to trail by a wide margin.
According to the Peoples Pulse Exit Poll 2025, the NDA is expected to win between 133 and 159 seats with a 46.2% vote share, while the MGB could secure 75 to 101 seats with 37.9% votes. The JVC poll projected the NDA winning 135–150 seats, while MGB could manage 88–103. Pollsters Matrize and Dainik Bhaskar also point to a similar outcome, giving the NDA a clear majority of 145–167 seats.
This morning, Sensex surged over 600 points to cross the 84,500-level while Nifty came close to the 25,900-mark.
According to Abhinav Tiwari, Research Analyst at Bonanza, the Bihar results are unlikely to cause major swings in the market. “Most investors have already factored in an NDA win. Markets are currently more influenced by global and national economic trends than by state-level outcomes,” he said.
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“Since polls suggest the NDA will stay in power, the result would largely signal continuity and stability, keeping market sentiment steady,” he said, adding that a stable government would ensure continuity in policy and public projects, which is what the market prefers.
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