Indian Stock Markets may be scaling New Highs after yesterday’s Exit Polls (or Post Polls) on various TV Channels. That can be understood as stock markets rally on speculation. But a closer look at the forecasts of these Post Poll surveys conducted during the Lok Sabha elections and telecast yesterday , suggests one thing: TV channels are Not unanimous on a clear victory for BJP-led NDA. Referring to TV Channels only, as most Newspapers today printed the same forecasts.
Why, TV Channels don’t seem Unanimous on a clear victory for BJP-led NDA?
First let’s see the forecasts of major channels,
CNN-IBN forecasted about 280, Headlines Today 272, India TV 289, ABP 281 and News 24 up to 340 seats for NDA in a house of 543. Simple majority is at 272.
Now lets answer, the Why.
As even though the average of these forecasts comes at 277 seats for NDA (although an average doesn’t show the right picture, as one forecast is 272 and the other is 340) , the extrapolations of these forecasts seemed to be giving NDA seats in the range of 238 to 340, or even lower 220-340. The forecasts are giving Congress-led UPA 108 (average).
If BJP led NDA gets 238 or 220, then it’s not a smooth sailing towards the Government formation. As BJP has to garner support to reach the 272. This also means that the UPA and other parties will be getting the bigger chunk, compared to when BJP gets 280. A possibility even stock markets are shivering about. A 220 seats for BJP led NDA or a 280 seats for NDA can make a big turnaround for the market.
We can call something unanimous, if the forecasts on different channels is within 2.5 percent -5 percent range of each other. This doesn’t seem to be the case.
Here, we must understand that the criticism is not of whether BJP will come to power or not. The criticism is the way News Channels and Newspapers are interpreting the forecasts.
It will be better to wait for the verdict on May 16, 2014.