Sensex at Record on Hopes for BJP Led Alliance in India

Bikram Pandey
12 May, 2014
New York City

Market indexes in Mumbai soared 5.5% in two days of trading after investors speculated BJP led alliance is likely to form the most stable government in three decade.

Market indexes in Mumbai soared 5.5% in two days of trading after investors speculated BJP led alliance is likely to form the most stable government in three decade.

India completed its month-long Lok Sabha election and 9,667 candidates competed for 543 seats. Of the eligible 814 million voters, more than 60% voted in Parliamentary elections.

Rupee strengthened for the second week and reached to a nine-month high of 59.013 against one dollar and the Sensex index closed at a record high.

The Sensex Index soared 556.77 or 2.4% to close at 23,551. The CNX Nifty jumped 155.45 to close at 7,014.25.

Stocks in Mumbai surged on the expectations that the new government will clear projects that are held up for more than three years.

After the close, the Election Commission said voter turnout averaged a record 66.4% compared to 58% in 2009 and the previous high of 64% in 1984 election.

The BJP and its allies are expected to win as many as 289 seats and the UPA, the current ruling coalition led by the Congress Party, is expected to win between 110 and 120 seats, Cvoter exit poll showed today.

The exit polls in India in last two elections in 2009 and 2004 overemphasized BJP seats and Congress win in 2004 was surprised most poll watchers.

The polls overestimated the BJP tally by 70 sets in 2004 and 30 seats in 2009.

The surprise win of Congress in 2004 also led to the one-day sell-off of 12.2% and two-day decline of 19%.

After the 2009 reelection of Congress, investors bid up the Sensex by 25% in one month after the election. The strength of the Congress Party win allowed the UPA alliance to drop Communist Party from the government.

The Sensex index, the closely watched benchmark, has jumped 17% since BJP announced Narendra Modi as its candidate for Prime Minister.