Indian markets have reacted exuberantly to the news of the Hindu nationalist Bharatiya Janata Party (BJP) sweeping elections in three states with the national stock indicator rocketing to a five-year-high.
The BSE (Bombay Stock Exchange) Sensex shot upward by nearly 500 points on Monday when markets opened, with investors giving the thumbs up to the BJP’s victories.
The elections are seen as the “semi-final” before the all-important national elections to the lower house of the Indian parliament by May 2014.
With the BJP doing well, there is widespread perception it is on the way to repeating the performance in the national elections.
The Sensex went past its previous record high of 21,321.53 on November 3, 2013, while the National Stock Exchange, Nifty, crossed its previous all-time high of 6,357 touched on January, 2008. The rupee also touched a four-month high of 60.84.
The BJP registered huge victories in the states of Madhya Pradesh and Rajasthan, and won by a slimmer majority in Chhattisgarh. In Delhi it emerged as the single largest party.
Media reports quoting analysts said the results reflected an anti-Congress sentiment. This was because of the various scams that the federal Congress-led coalition had got itself into. In addition, several of its policies did not go down well with the corporates.
Some analysts however cautioned it would be premature to read too much into the assembly victories as the national polls next year may be a different ball game. Foreign investors did not react equally optimistically to the BJP victories as of the four states, three were anyway the party’s strongholds, reports said.