Here’s a recipe to make Indian stocks investors happy: tie the hands of the ruling Congress-led government and hint that the opposition Bharatiya Janata Party will be forming the next government.
India’s benchmark 30-share S&P BSE Sensex hit a record high Thursday of 21513.87 points, marking the third straight session of gains.
As India heads towards national elections, investors have been following the twists and turns of the political world more closely in recent months. The next election will likely have a big impact on whether, when and by how much Asia’s third largest economy will rebound.
The country announced this week that the national polls will begin April 7 and be done by May 16 which has some optimists hoping that uncertainty about who will be leading the world’s largest democracy will be over in a little more than two months.
Some investors have become frustrated by the ruling Congress party because they believe it has stalled reforms and delayed important investments in the close to ten years it has been in power. Instead, critics say, the Congress-party led coalition has focused on populist measures, including a bill to provide almost free food to around two thirds of the population.
One good thing about election season, investors say, is that Congress will not be able to announce any new perks for the poor. The Election Commission of India prohibits parties from launching welfare programs during the election process.
“The uncertainty is now over,” said Sharmila Joshi, an independent research analyst in Mumbai. “The market is (optimistic) that there won’t be any more populist measures.”
via Stock Market Cheers Potential End of Congress Reign – India Real Time – WSJ.
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