Fear of Modi not coming to power with majority makes the market jittery

The market is bracing itself for an extreme event risk where Prime Minister Narendra Modi will fail to retain power for a second term.

Investors in India are bracing for an extreme event risk next week: Prime Minister Narendra Modi failing to retain power.

The optimistic tone for the nation’s assets has fizzled out as the trade impasse combines with concern about Modi’s ability to repeat his landslide 2014 victory amid a resurgent opposition, farm distress and a job crisis. 

A result that upsets the market’s base case view -- the ruling party winning with a slim majority -- could lead to an adverse reaction, analysts say.
 

“At a time when the trade spat has roiled risk assets globally, a worst outcome will be