MUMBAI: India’s stock market surged yesterday, touching a new high on hopes that election results next week will usher in a stable government capable of pushing reforms and reviving the flagging economy.
The Bombay Stock Exchange’s benchmark index rose 3.15 percent to hit 23,048.49 points, before trimming some of the gains to close at 22,994.23 points.
“The market was cautious over the last few days,” said Alok Churiwala, managing director of brokerage Churiwala Securities.
“But now, the view is that the National Democratic Alliance (NDA) led by the BJP (Bharatiya Janata Party) will be able to form a government without needing any last minute supporters that impinge on government functioning.”
Results in India’s mammoth election are due to be announced on Friday, May 16.
The right-wing opposition BJP, led by Hindu hardliner Narendra Modi, is expected to oust the centre-left Congress from power after 10 years.
Support for Congress has been undermined by a series of graft scandals, surging inflation and a sharply slowing economy during its decade in power.
While the BJP is expected to win most seats, it remains to be seen whether it will muster enough support to form a majority to implement structural changes to the stuttering economy.
That uncertainty is prompting some Indian retail investors to stay on the sidelines despite the current market rise, analysts say.
India’s economy is growing at its slowest rate in a decade with industry leaders demanding labour market reforms and lowering of interest rates to boost investment.
AFP
