- POSTED: 13 May 2014 20:00
- UPDATED: 13 May 2014 23:15
India's stock market raced to a record high for a third straight day on Tuesday after exit polls forecast that Hindu nationalist party leader Narendra Modi would become the next prime minister.
MUMBAI: India's stock market raced to a record high for a third straight day on Tuesday after exit polls forecast that Hindu nationalist party leader Narendra Modi would become the next prime minister.
Most exit polls after balloting ended in the marathon election on Monday suggested Modi's right-wing opposition alliance had won enough votes to form a government without needing new coalition partners.
The benchmark Bombay Stock Exchange index, known as the Sensex, rose 2.19 per cent to a new intra-day high of 24,068.94.
It ceded some gains but still finished the day up 1.36 per cent at 23,871.23 points, a record closing high.
The Sensex has now gained over 21 per cent since the Bharatiya Janata Party (BJP) 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," Harendra Kumar, head of Mumbai-based brokerage Elara capital, told AFP.
"Even if they need more allies they will not present a stumbling block for reforms," Kumar said.
Four of five exit polls showed the BJP-led alliance reaching the 272 seats needed for a majority in the 543-member parliament, but Indian exit surveys in the past have been unreliable.
Analysts believe that if the official results due on Friday mirror the exit polls, India's markets are likely to stay bullish.
But some analysts warn if the BJP and its allies fail quickly to form a government after the results, the markets could go into a tailspin.
Modi has campaigned as a centrist reformer intent on kickstarting India's economy, which is growing at its slowest rate in a decade.
During the election campaign, he steered largely clear of the Hindu nationalist rhetoric for which he had been noted.
The ruling Congress party has sought to portray Modi as a Hindu hardliner who could foment communal tensions in the religiously diverse nation, in which Muslims account for 13 per cent of the 1.25 billion population.