UPA Slightly Ahead in Projected Hung Verdict, Federal Bond Yield Falls

The ruling UPA can pick slightly more seats than its main rival alliance NDA in the current parliamentary elections with still lacking a greater number to form the government, predict initial exit polls conducted by private news channels.

Immediately after the last vote was cast, news channels started relaying their exit poll results. The News X channel forecast 199 seats to 191 for the Congress-led UPA. If the 32 seats projected for RJD, LJP and SP are added to the figure, it goes up to 227. The earlier projections for BJP-led NDA are 180 seats.

Two other prominent news channels Headlines Today and the UTVi business also gave much the same seats to both alliances and forecast a repeat of 1996 when the new administration collapsed after just 13 days – at a time the economy is growing at its slowest in six years and militancy is rising in neighboring Pakistan.

These figures are more depressing for for communists in the state of West Bengal who won 60 seats in 2004. Exit polls predict 38 seats for them. The Third Front, comprising of smaller regional parties including the BSP, is projected to win nearly 134 seats.

In the meanwhile, federal bond yields fell as exit polls said the ruling Congress-led coalition was slightly ahead in the race to form the new government, but supply concerns put a floor to the fall.

The benchmark 10-year bond yield ended at the day’s low of 6.33 percent after earlier rising to a four-week high of 6.47 percent. It had closed at 6.41 percent on Tuesday.

“The yields had firmed fearing hung (parliament) situation… so if Congress leads then market should find comfort,” said Anoop Verma, an associate vice president at Development Credit Bank in Mumbai.

It should be noted that the exit polls after the 2004 election by channels including NDTV, Zee News and Aaj Tak overestimated the strength of the then governing BJP and its allies by about 50-70 seats, suggesting they would win days before being dumped from office with just 179 MPs.

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