The Sensex, India’s major stock exchange, has risen to a new record level on optimism that the Bharatiya Janata Party (BJP), led by Narenda Modi, will emerge victorious following the recent general election in collaboration with its allies. The index hit 23941 points in Tuesday’s trading session and has been buoyed recently on optimism of a BJP victory. The investment community is pinning its hopes on a new BJP administration to reverse the slowdown that the Indian economy has suffered lately under the current Congress-led government.
Exit polls published on Monday show that the National Democratic Alliance, which is led by the BJP, to be well ahead on projected seats with the government faring poorly as voters make their discontent known. However, with the vast size of the Indian electorate, exit polls have proved unreliable in the past.
The Indian general election was held over a period of 36 days in nine phases. India is the world’s largest democracy and some 814 million citizens were eligible to vote. Participation has been high by Western standards – and given the logistic complexities – with turnout expected to be a record 66.4%. The vote will be counted on Friday.
The Congress-led government has been in control during the slowest period of growth that the nation has experienced in a decade. The opposition’s campaign has been built on promises of economic reforms designed to boost growth and investment and curb inflation.
The optimism seen in the new Sensex record is because Mr Modi’s BJP is seen as being pro-investment and wanting to improve infrastructure in the vast nation. If the electorate gives the BJP the mandate it needs, analysts are optimistic that the country’s growth will be given a long-term boost.