Sensex surge driven by hopes of strong regime
The strong possibility of Mr Narendra Modi taking charge as Prime Minister in New Delhi has already boosted the market sentiment. For the first time in its history, on Tuesday, the benchmark index of the Indian equities markets crossed the 24,000-point mark. The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange has jumped by a whopping 5.4 per cent since Monday when the last vote in the 16the lok Sabha election was cast. As the indicated by the exit poll data released after the month-long polling process drew to a close, there is ample reason to believe that not only will the Bharatiya Janata Party-led National Democratic Alliance form the next Government but that the new coalition will be a stable one. Even by the most conservative of estimates, the magical figure of 272 seats in lok Sabha is well within the NDA's reach. The Times Now-ORG survey has predicted that the NDA will get only 249 seats — in other words, it will need the support of just 23 more MPs to secure a majority. This should still be a cakewalk for the alliance. On the other end of the spectrum is News24-Today's Chanakya Exit Poll which has given the BJP alone about 291 seats (if accurate, this will be the first time since 1984 that India will have a single-party Government) and the NDA as many as 340 seats. The final figure will probably hover somewhere in the middle which is where the CNN-IBN-CSDS-lokniti post-poll survey stands with 282 seats for the NDA. Slice the figures whichever you want, they all point towards the same direction — a strong and steady NDA Government.
This is a huge relief to investors who had previously worried, and rightly so, that even if the paralysed Congress-led UPA regime is voted out of power, the BJP may not be able to cobble together the ruling coalition or even if it manages to take charge, may not have the numbers necessary to push through much-needed economic reforms.
The election arithmetic apart, the single-most important factor that has contributed cheered the market is, of course, Mr Modi’s good governance model in Gujarat where he has cut out red-tape and helped businesses, big and small, flourish. Additionally, the BJP's own pro-business image as well as the party’s stellar economic record from the last time it was in power has also contributed to upbeat mood in the market in no small measure.