Bihar CM back into NDA fold: Markets cheer break in mahagathbandhan 

Nitish Kumar decision to snap ties has come as a jolt to the Grand Alliance, or the 'Mahagathbandhan' as it was popularly known, but the markets will take this development as a long-term positive for the Narendra Modi - led National Democratic Alliance (NDA) government, feel analysts.Reacting to key domestic and global developments, themarkets gained ground on Thursday, with the S&P BSESensex rallying nearly 220 points to 32,602 levels and the Nifty50 index gaining 66 points to 10,087 levels.

In post market hours on Wednesday, Nitish Kumar quit as the Chief Minister of Bihar, ending the two-year old 'Mahagathbandhan' that included his party - the Janata Dal (United), or the JDU, Rashtriya Janata Dal (RJD's)Lalu Yadav and the Congress.

The move, analysts say, will be seen as a long-term positive by the markets and will strengthen the government's bargaining power in the Rajya Sabha, the Upper House of Parliament.

A loss in Bihar was the biggest setback for Narendra Modi after his party formed the government in 2014. Nitish forming a government again and forming an alliance with the BJP will give more fire power to the latter in the Rajya Sabha. This augurs well for the overall policy reform agenda of the government. It is a blessing in disguise for the markets," says A K Prabhakar, head of research at IDBI Capital

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