Page last updated at 06:55 GMT, Monday, 18 May 2009 07:55 UK

Indian stocks surge on election

Indian trader
Trading on the Sensex had been suspended once already

Indian stocks have surged after the Congress party won a surprisingly decisive victory in national elections.

The benchmark Sensex index jumped 17%, or 1,306 points, to 14,272, forcing the Bombay Stock Exchange to shut down for the day.

Trading had already been halted earlier, after investors pushed stocks above their daily maximum limit.

The Congress victory gives the party a strong mandate to continue reforms that have spurred Indian economic growth.

'Big bang'

The broader Nifty index, traded on the National Stock Exchange, also rose 17%, over 500 points, to 4,308. Trading was also halted earlier and the stock exchange was closed down.

Meanwhile, the Indian rupee jumped over 2% to 48.32 a dollar, its biggest gain since 1998.

"This was the big bang event that investors were looking for," said Hitesh Agrawal, head of research with Angel Broking. "We expect the government to have greater flexibility to boost economic reform and growth from here on."

The Congress-led alliance is projected to win 260 seats, with rivals the BJP on 157. This confounded projections of a close election.

The communist parties, who had blocked reforms in insurance, pension funds and the selling off of state-owned companies, lost more than half their parliamentary seats.

Shares in some of India's largest companies also climbed. Reliance gained 37% and ICICI Bank jumped 25.3%, while carmaker Tata gained 40% and IT firm Infosys rose 9.8%.

The Sensex had climbed 26% already this year before the Congress Party victory was declared over the weekend.

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Coalition Total
United Progressive Alliance 262
National Democratic Alliance 158
Third Front 76
Fourth Front 27
Other Parties 20


FTSE 100
22.84 0.42%
18.55 0.32%
Cac 40
14.37 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
Data delayed by at least 15 minutes

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