URL Rewrite is not working in Nginx - .htaccess

Question

URL rewrite is not working in Nginx and operating system is Ubuntu 12.4 Lts
when open http://mvc.loc it is working
but when i try to open http://mvc.loc/login Not working
404 Not Found
nginx/1.1.19
.htaccess
<IfModule !mod_rewrite.c>
ErrorDocument 500 "mod_rewrite must be enabled"
</IfModule>
RewriteEngine on
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*)$ /index.php?u=$1
virtual hosts for mvc.loc
server {
listen 80;
server_name mvc.loc;
access_log /var/log/nginx/mvc.loc.access.log;
error_log /var/log/nginx/mvc.loc.error.log;
root /usr/share/nginx/www/mvc;
index index.php;
# use fastcgi for all php files
# Are you sure you have this set up?
location ~ \.php$ {
fastcgi_pass 127.0.0.1:9000;
fastcgi_index index.php;
fastcgi_param SCRIPT_FILENAME $document_root$fastcgi_script_name;
include fastcgi_params;
}
# deny access to apache .htaccess files
location ~ /\.ht {
deny all;
}
}

Answer 1

location / {
rewrite ^(.*)$ /index.php?u=$1 last;
}

Answer 2

Well #NanheKumar's answer got the rewrite correct but it ignored the first 2 rules in the htaccess
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
This means check if the request doesn't match a file and doesn't match a directory, to imitate this exact behavior you can use try_files like this
location / {
try_files $uri $uri/ /index.php?u=$request_uri;
}
This will make sure to serve requests that point to an asset or a directory directly first then if neither it would pass the request to index.php
EDIT: unless index.php is able to serve assets, this will cause all assets ( images, css, javascript, etc ) to show errors because index.php will be receiving arguments it's not expecting. Think about something like this http://example.com/index.php?u=/images/background.jpg