Indian Markets Hit Record Highs As Exit Polls Predict Modi Win

By Siddhartha Kumar (DPA)

NEW DELHI  —  India's stock markets hit record highs Tuesday after exit polls predicted that Hindu nationalist leader Narendra Modi was on course to become the next prime minister.

The 30-share Sensex of the Bombay Stock Exchange rose over 2 per cent at midday to cross the 24,000 level for the first time. It closed the day's trade at 23,871.23, a gain of 320.23 points.

The index has gained more than 1,500 points in three sessions since Friday.

The National Stock Exchange's 50-share Nifty also closed at a record high of 7,108.75, up 94.50 points or 1.35 per cent.

Market analysts said investors were optimistic that the Modi-led Bharatiya Janata Party would form a stable government and initiate measures to revive the economy that has seen a slowdown in recent years.

"Exit polls indicate the possibility of a stable government. In the initial jubilation surrounding a new government, the markets are expected to see a swift rise," said Sudhakar Ramasubramanian, chief of Aditya Birla Money.

"The budget and the ability of the new government to address the (economic) policy paralysis and kick-start the investment cycle will have major bearing on the extent of investor optimism in the marketplace," he said.

The NSE has surged around 20 per cent since Modi was declared the BJP prime ministerial candidate on September 13, broadcaster NDTV reported.

A large part of gains have come on account of strong buying by foreign investors, who have purchased cash shares worth about 4.3 billion dollars so far this year.

Modi is currently chief minister of Gujarat, one of India's most economically advanced states. He has promised to develop new jobs and investment in Asia's third-largest economy.

Most exit polls released after the five-week elections that ended Monday suggest that Modi's party will secure enough seats in the 543-member parliament to enable him to become premier.

But Indian exit polls have been wrong in the past, and some political analysts remain wary of them. Official results will be released on Friday.

In New Delhi, Premier Manmohan Singh received a standing ovation and emotional farewells on his last day at work after a decade in office.

Singh, 81, bid goodbye to his personal staff in South Block near the Parliament House in the Indian capital, the IANS news agency reported.

The economist-turned-politician had announced earlier this year that he would not seek a third term even if his party won this time.

Singh was to chair his last cabinet meet Saturday after which he will leave office.