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Thursday, October 7, 1999 Published at 13:09 GMT 14:09 UK

World: South Asia

Markets welcome BJP win

A broker monitors stock prices as he follows the election count

By Sanjeev Srivastava in Bombay

Indian Elections 99
Full results
The Indian stock market has shot up by more than 5% in the financial capital Bombay, after the BJP-led National Democratic Alliance secured a clear majority in parliament.

The market was also upbeat after the upgrading of India as an investment destination by Moody's, the international credit rating agency.

It was a day of rare frenzy in the Indian capital markets.

Aashish Pitale of JP Morgan, Mumbai: "The government needs to attract foreign capital in order to boost the infrastructure"
The Bombay stock exchange sensitive index closed at an all-time high of 4,963 points, up more than 5%.

On the National stock exchange, the gains were even sharper and many stocks closed at an all-time high.

Observers attribute this to the markets' perception that the NDA's victory should result in the formation of a more stable government than last time.


The stock markets also appear to be pleased with the pro-reform economic policies of some of the bigger allies of the BJP in the NDA.

[ image: Finance Minister Sinha has promised more reforms]
Finance Minister Sinha has promised more reforms
One of them is the Telugu Desam party in the southern state of Andhra Pradesh, which is certain to be the second-biggest party in the NDA after the BJP.

The TDP is led by the computer savvy Chief Minister, Chandrababu Naidu, who has a business friendly image.

The business community expects the new government to speed up economic reforms.

The Finance Minister, Yashwant Sinha, recently said the opening up of India's insurance sector, and other measures to usher in the second wave of reforms, would be high on the BJP's priority list.

The stock markets also expect more foreign investment to flow in once a more stable government is in place.

A hint of things to come has already been given to some extent by the decision of international credit rating agency, Moody's, which has upgraded India from a stable rating to a positive grade.

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