BQuick On Dec. 11: Top Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Meet Your New RBI Governor

Veteran bureaucrat Shaktikanta Das will take over as the 25th Governor of the Reserve Bank of India for a period of three years, the government said in an announcement this evening.

• The appointment follows the surprise resignation of Urjit Patel on Dec. 10. Patel decided to step down immediately citing “personal reasons” amid a stand-off with the government on a host of issues.
• Shaktikanta Das is a 1980 batch IAS officer from the Tamil Nadu cadre. He is currently a member of the Fifteenth Finance Commission. He also represents India at the G-20 in a role of a sherpa.
• Das was the economic affairs secretary to the Government of India till May 2017 and was in office when demonetisation was announced.
• During that period, when cash was in short supply, Das was often seen defending the government’s decision even as the RBI remained silent.

Here’s what the markets may make of the new appointment.

2. A Governor Most Controversial

Urjit Patel’s successes and failures. His big success—a new inflation regime. His big failure—inability to communicate, writes Ira Dugal.

• He will be remembered for a few obvious reasons: as the governor who presided over demonetisation.
• He continued the clean-up of the banking sector and then started to move to the next step: pulling up both public sector and private banks.
• While Patel presided over some important changes, he did a lot of it without much consultation with external stakeholders.

The biggest fault line of the Patel governorship was his inability to put his point across.

3. Urjit Patel’s Surprise Parting Gift

Urjit Patel sprung a surprise on derivative traders, who had taken positions to trade on the state election results on Tuesday. Going into the verdict, the market had already discounted a Congress revival in the heartland after having been wiped out in the 2013-14 general election.

• The traders took short positions as the Nifty ended at 10,488, down 205 points or 1.9 percent, on Monday.
• The implied volatility rose to close to its highest in a month, jumping 7.3 percent. In the options market, the maximum put contracts were for 10,000 and most call contracts for 11,000—suggesting traders expected the index to stay within that range.
• But Patel’s surprise resignation caught derivative traders off guard. Initially, markets plunged in early-morning trades. But then traders factored in that Patel’s exit could mean easier bad loans guidelines for the financial sector.

Traders who were short on banks and non-bank lenders pared their positions.

4. Indian Markets Shrug Off Patel’s Resignation, Election Results

Indian equity benchmarks rebounded despite Urjit Patel's exit from Reserve Bank of India and ruling Bharatiya Janata Party trailing to Congress in Rajasthan and Chhattisgarh.

• The S&P BSE Sensex rose 0.54 percent or 190 points to 35,150.
• The NSE Nifty 50 Index advanced 0.6 percent or 61 points to 10,549.
• Sensex swung 781 points intraday, while the Nifty touched a high of 10,567 and a low of 10,334.
• All 11 sector gauges compiled by National Stock Exchange ended higher led by the Nifty PSU Bank Index's 2.65 percent gain.

Follow the day’s trading action here.

5. Close Race For Madhya Pradesh

The race to power in Madhya Pradesh is set for a photo finish. Both BJP and Congress exchanged leads in the crucial state multiple times during the day.

• Early trends showed Congress galloping away, but since then the BJP has been slowly gaining ground.
• As of 7:30 p.m., Congress was leading in 111 seats while the BJP in 110.
• There are 16 constituencies where leading candidates were ahead by less than 500 votes. Eleven of these are from the BJP.
• The narrowest gap was in Amarwara in the Chhindwara district, where BJP’s Premnarayan Thakur was leading by just 12 votes. Four BJP candidates were leading by less than 100 votes.

Follow the intense race till its finish here.

6. Congress Set For Victory In Rajasthan

The contest seems to be a little less intense in Rajasthan where the Congress looks likely to grab power. It is has won 71 seats and is leading in another 27. That still means it is short of the halfway mark by two seats.

• Key leaders, including chief minister aspirants, Sachin Pilot and Ashok Ghelot, and old guard, CP Joshi have won in their respective constituencies.
• From the BJP camp, incumbent Chief Minister Vasundhara Raje is ahead in her stronghold of Jhalrapatan.

Here are the key battles to watch out for.

7. KCR’s Big Bet Pays Off In Telangana

K Chandrashekar Rao’s shot in the dark to call state assembly elections in Telangana six months earlier than scheduled has turned out better than he would’ve hoped for.

• Not only has his party, the Telangana Rashtra Samiti, swept the state but it has also improved significantly its tally from the previous assembly elections.
• The TRS is leading in 87 out of 119 seats—from the 65 seats it had won in 2014. The Congress, even with its alliance with the Telugu Desam Party, is leading in 21 seats.
• KCR’s bet paid off for two reasons mainly: His pro-people governance and Congress hastily cobbling up an alliance with the TDP months ahead of the elections.
• “TRS came in based on a very significant issue for the voters: a separate Telangana state. But we’ve actually seen them deliver on good governance,” said Richard Rossow, senior adviser at the Center for Strategic and International Studies.

The victory may set the path for KCR to go out on his own.

8. Jogi-Mayawati’s Gift To Congress

Rahul Gandhi may have to send a thank you note to Ajit Jogi and Mayawati. The alliance between the two helped the Congress in conquering Chhattisgarh, which had remained a Bharatiya Janata Party stronghold since the state’s formation in 2001.

• Janta Congress Chhattisgarh and the Bahujan Samaj Party collectively won 10.9 percent of the total votes. That is largely the difference between the vote shares of the Congress and the BJP.
• Trends show that in earlier elections, the vote share difference between the two national parties had never been so wide.
• In 2008 and 2013 state elections, BJP’s vote share in Chhattisgarh was merely 1 percent higher than that of the Congress.

But that can’t take away the credit from the Congress.

9. Mizoram Says No To Congress

The people of Mizoram have voted out the Congress party with the incumbent chief minister Lal Thanhawla losing both the seats he contested from.

• The Mizo National Front emerged victorious with 26 seats returning to power after 10 years.
• The BJP has only managed to take a lead in one seat and other parties were leading in eight seats.
• The Congress was hoping to hold on to their last bastion in the Northeast. However, most exit polls had already predicted a win for the MNF in the state.

Congress says it underestimated the MNF.

10. What Dalal Street Made Of State Election Results

The state elections trends show local issues were more at play rather than national, Vallabh Bhansali, chairman of Enam Group, told BloombergQuint in an interaction. “Most of the exit polls have not worked out except Rajasthan where the Congress did better but the BJP didn’t do that badly either.

• The state assembly elections results is a sort of a guidance for some parts of India and is not a verdict for the entire country, Mizuho Bank’s strategist Tirthankar Patnaik said.
• The markets would witness an increase in uncertainty dramatically if the state elections are not in the favour of BJP, Rohit Garg, director of Asia forex and rates at Bank of America Merrill Lynch, said.

Here’s what other experts had to say about state elections results.