Indian bourses hit record highs as Modi heads for decisive win
INDIAN stock markets surged to record highs yesterday on hopes of a business-friendly government under Hindu nationalist Narendra Modi as polls showed him closing in on victory in the world's biggest democracy.
"Modi at Delhi Gate," said a headline in the Mail Today, while the Hindustan Times read simply, "Exit Polls: Enter Modi", after a flurry of surveys released after voting ended on Monday pointed to a decisive result.
All the forecasts showed Mr Modi's right-wing Bharatiya Janata Party (BJP) and its allies trouncing the left-leaning Congress party, which has been in power for a decade, and most indicated they would seal a majority.
Mr Modi struck a conciliatory tone by saying it was time for "healing" after an often bitter five-week contest which saw 551 million voters cast their ballots.
While a BJP victory had been expected, the apparent scale of defeat for Congress was still striking, with exit polls showing support for the party which has ruled India for most of the post-independence era at a nadir.
BJP and its allies are expected to win 249 to 340 seats, according to six exit polls released, with 272 needed for a majority. The Congress party and its allies are projected to win between 70 and 148 seats.
Results are due on Friday, with some still cautioning against overconfidence in a BJP victory, given notorious forecasting errors in the last two general elections.
Mr Modi's election would present a headache for the United States, which refused to deal with him for years in the aftermath of religious riots in the state of Gujarat in 2002 shortly after he became its chief minister.
However, foreign and domestic investors have few misgivings about his past, and appeared in no mood to heed the warnings about unreliable pollsters.
"The expectation is that (the BJP-led National Democratic Alliance) will get to form the government comfortably and even if they need more allies they will not present a stumbling block for reforms," Harendra Kumar, head of Mumbai-based brokerage Elara Capital, said.
The BSE index ended up 1.36 per cent at 23,871.23, while the NSE index ended 1.35 per cent higher at 7,108.75, adding to their over 4 per cent gains in the previous two sessions.
The rupee advanced as much as 0.8 per cent to 59.59 against the US dollar.
The BSE index has gained around 22 per cent since the BJP chose Mr Modi as its prime ministerial candidate in September.
The gains came despite new data showing that industrial production shrank in March for the fifth time in sixth months, underlining the scale of the challenge for the next government in reviving growth.
"It looks to be a very good mandate to govern," said Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former finance ministry official.
"Whether he can rise to that challenge of pushing through reforms in such a vast and complex country as India remains to be seen."
AFP, BLOOMBERG, REUTERS