Indian markets witnessed a historic surge on Monday, propelled by expert predictions of a resounding victory for Prime Minister Narendra Modi in the national elections. The benchmark Sensex index, tracking 30 large companies, and the broader Nifty 50 index both surged over 3% in early trading.
The rally follows the culmination of India’s mammoth weeks-long election over the weekend. Modi, expressing confidence in his reelection, stated on X shortly after polls closed, “I can say with confidence that the people of India have voted in record numbers to reelect the … government.”
At 73, Modi campaigned on his economic achievements over the past decade, during which India experienced robust growth. Results of the election are set to be declared on Tuesday, with Modi’s party securing 303 seats in the previous election in 2019. Analysts point to local exit polls indicating a larger victory for Modi this time, driving optimism in the market.
Manish Chowdhury, head of research at brokerage StoxBox, remarked, “With the exit polls pointing towards a 370-seat mark and ahead of street expectations of 320-350 seats, markets have reacted positively. We expect to see higher flows both from domestic as well as foreign investors going ahead.”
The market surge also follows the release of impressive economic growth numbers, with India’s economy expanding by over 8% in the fiscal year ending in March, solidifying its position as the world’s fastest-growing major economy.
Investors anticipate significant reforms under a Modi-led government, particularly in land and labor sectors, crucial for sustaining growth. Analysts assert that sustained expansion, ideally exceeding 8% annually, is imperative for India to achieve economic superpower status.
Shares in the Adani Group, a conglomerate spanning ports to power, also soared on Monday. Adani Enterprises, the group’s flagship firm, saw a nearly 7% increase, while Adani Power surged nearly 16%. Founder Gautam Adani reclaimed his title as Asia’s richest man last week, surpassing Mukesh Ambani of Reliance Industries.
Ambani and Adani, both vocal supporters of Modi, have seen remarkable growth despite challenges. Adani, in particular, faced accusations of fraud by Hindenburg Research, which he vehemently denied. His resurgence underscores investors’ confidence in his strategic investments aligned with Modi’s development priorities.
India’s stock markets have flourished under Modi’s leadership, with the total market capitalization surpassing $4 trillion last year. The National Stock Exchange of India (NSE) also ascended to become the world’s sixth-largest bourse earlier this year, testament to India’s growing prominence in global financial markets.
