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Indian shares hit new high as opposition wins majority | Indian shares hit new high as opposition wins majority |
(about 1 hour later) | |
Indian shares have hit a record high as the main opposition party, seen as business friendly, won an absolute majority in state elections. | Indian shares have hit a record high as the main opposition party, seen as business friendly, won an absolute majority in state elections. |
The Hindu nationalist Bharatiya Janata Party (BJP) won 162 assembly seats in the northern state of Rajasthan, leaving the ruling Congress with just 21 seats. | The Hindu nationalist Bharatiya Janata Party (BJP) won 162 assembly seats in the northern state of Rajasthan, leaving the ruling Congress with just 21 seats. |
India's rupee also hit a four-month high against the US dollar. | India's rupee also hit a four-month high against the US dollar. |
The main share index, the Sensex, was 2.3% higher before ending up 1.6%. | |
It reached 21,483.74 points during trading on Monday but closed a few notches lower. | It reached 21,483.74 points during trading on Monday but closed a few notches lower. |
This marks a turnaround from August this year, when the Indian rupee fell to a new all-time low against the US dollar amid concerns about the prospect of scaling back quantitative easing in the US. | This marks a turnaround from August this year, when the Indian rupee fell to a new all-time low against the US dollar amid concerns about the prospect of scaling back quantitative easing in the US. |
The news may bolster the BJP's chances of winning India's general election in May 2014. | The news may bolster the BJP's chances of winning India's general election in May 2014. |
A briefing note by Nomura to its clients said: "The BJP is considered more right-of-centre, pro-business and reform-oriented." | A briefing note by Nomura to its clients said: "The BJP is considered more right-of-centre, pro-business and reform-oriented." |
It added: "The fact that runaway spending by the ruling party has not won any votes could be taken as a very positive signal by the markets in terms of voter preference for the kind of policy favoured by the electorate." | It added: "The fact that runaway spending by the ruling party has not won any votes could be taken as a very positive signal by the markets in terms of voter preference for the kind of policy favoured by the electorate." |
Shares in the industries widely considered to do well from a BJP win in next year's elections, such as infrastructure and construction, did particularly well. | Shares in the industries widely considered to do well from a BJP win in next year's elections, such as infrastructure and construction, did particularly well. |
Sonam Udasi head of research at IDBI Capital, said: "The markets have risen on the hope that the BJP can come in with decisiveness in the general elections in May." | Sonam Udasi head of research at IDBI Capital, said: "The markets have risen on the hope that the BJP can come in with decisiveness in the general elections in May." |
These results will be not be welcomed by the ruling Congress party, which has recently been trying to attract foreign investments to boost the economy. | These results will be not be welcomed by the ruling Congress party, which has recently been trying to attract foreign investments to boost the economy. |
Leader of the Congress party, Sonia Gandhi, said: ``We will introspect and take action to rectify our mistakes.'' | Leader of the Congress party, Sonia Gandhi, said: ``We will introspect and take action to rectify our mistakes.'' |
She called an emergency meeting of party officials. | She called an emergency meeting of party officials. |
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