New Delhi: India’s Nifty futures trading in Singapore fell more than 1% after the largest ally of the Congress party in the governing United Progressive Alliance decided to withdraw support over decisions to allow the entry of foreign retailers and an increase in fuel prices, reducing the government to a minority.
SGX S&P CNX Nifty Index futures for September delivery shed 1.28% to 5,538 at 4.46pm in Singapore. Stock exchanges in India were closed on Wednesday because of the Ganesh Chaturthi festival.
Most Asian indices, including Japan’s Nikkei 225 Stock Average and Hong Kong’s Hang Seng Index, gained after the Bank of Japan boosted asset purchases.
Even though the Mamata Banerjee-led Trinamool Congress’s (TMC) decision to quit the coalition is unlikely to pose an immediate threat to the survival of the government, the decision may leave the ruling coalition more vulnerable to the whims of other parties, including the Samajwadi Party and Bahujan Samajwadi Party, which support it from the outside.
Banerjee’s party has 19 members in the lower House of Parliament. She said on Tuesday that ministers belonging to her party, including a cabinet member and five ministers of state, will resign on Friday.
The TMC had given Manmohan Singh’s government a 72-hour deadline to withdraw the measures, including raising diesel prices and allowing foreign retailers to open stores in India. The steps were among a set of measures that were approved by the cabinet on Friday to boost economic growth and narrow the fiscal deficit.