Mumbai: India's stock market surged for the third straight day to a record high on Tuesday after exit polls indicated that Hindu nationalist party leader Narendra Modi was on course to become the country's next Prime Minister.
Most exit polls released after the final round of voting on Monday indicated that Modi's right-wing opposition alliance had secured votes to form a government without needing new coalition partners. The Bombay Stock Exchange index, also known as the Sensex, rose 1.57 per cent to a new high of 23,921.91 after trading opened, surpassing Monday's record peak of 23,572.88.
The Sensex has now gained more than 21 per cent since the Bharatiya Janata Party chose business-friendly Modi as its prime ministerial candidate in September."The expectation is that (the BJP 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, told AFP.
Four out of the five polls showed the BJP-led alliance reaching the 272 seats needed to form a majority in the 543-member national parliament, but Indian exit polls in the past have been unreliable. Analysts believe that if the results due on Friday do reflect the exit polls' outcome then India's markets were likely to stay bullish.
But some warn that if the BJP and its allies fail to quickly form a government after the final results are announced, the markets could go into a tailspin. Modi has campaigned as a centrist reformer intent on kickstarting India's economy, which is expanding at its slowest rate in a decade.
He has steered clear of Hindu nationalist rhetoric for which he was previously famed, but the ruling Congress party has sought to portray him as an extremist who could exacerbate religious tensions.
