India’s Congress party was headed for a bruising defeat in key state elections, including in the capital, early results showed on Sunday, underlining the struggle it will face to cling to power in a national election due by May.
Congress, led by the Nehru-Gandhi dynasty that has ruled India for most of the 66 years since independence, is facing widespread anger at corruption and high inflation after two successive terms at the head of a national coalition.
The center-left party’s main opponent, the Hindu nationalist Bharatiya Janata Party (BJP), was the clear winner in three big states that went to the polls, though with the count still on it was a neck-and-neck race in a fourth.
Markets are closely tracking the outcome of the polls, seen as a test of support the BJP’s business-friendly candidate for prime minister, Narendra Modi. Bond, rupee and share prices rose last week after exit polls predicted a strong BJP performance.
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