Indian stocks surged to all-time highs on Tuesday, as the end of the country’s month-long parliamentary election brought the prospect of a transfer of power away from the Congress Party, which has dominated the country’s politics since independence.
Narenda Modi, leader of the right-wing Bharatiya Janata Party, and chief minister of Gujarat, a state of more than 60 million people, looked likely to win a majority in India’s parliament, the Lok Sabha, according to exit polls.
The benchmark S&P BSE Sensex gained 320.23 points or 1.36 per cent to close at 23,871.23, its highest ever level. The Sensex has gained 12.76 per cent since the beginning of the year.
The S&P CNX Nifty Index, which tracks a different basket of stocks on the National Stock Exchange, closed up 1.35 per cent at 7,108.75.
Majority state-owned Bharat Heavy Electricals led the gains, climbing 10.25 per cent amid speculation that a Modi-led government would introduce measures to liberalise India’s public firms. Oil and Natural Gas Corporation, in which the Indian government has a 69 per cent stake, gained 3.81 per cent.
The rupee fell to 59.94 to the dollar in intraday trading – a drop of 0.49 per cent, before rising to 59.67 later in the session. Bloomberg News reported that this was because of intervention by the Reserve Bank of India, which informally maintains the rupee price against the dollar.
“We expect the rally to continue on hopes of a strong government coming to power,” Shishir Bajpai, a director at a Mumbai wealth management firm, told Bloomberg.
The election results will be announced on Friday.
abouyamourn@thenational.ae
* with Bloomberg News
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