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Narendra Modi is the Indian stock market’s $300 billion man

AP Photo/ Rajesh Kumar Singh
Narendra Modi supporters celebrate after the party’s historic victory.
By Heather Timmons
Published Last updated This article is more than 2 years old.

India’s Sensex index rose in mid-day trading to a new record today of over 25,000 and the Indian rupee hit 10 month highs against the US dollar on the back of a landslide victory for the Narendra Modi-led Bharatiya Janata Party. The rally wasn’t a one-time event—since Modi was named prime ministerial candidate on September 12, Indian equities have gained over $300 billion, according to Bloomberg data.

Ahead of today’s election results, the stock market had already touched new heights, as foreign institutional investors poured money into Indian stocks. The stock market has been responding bullishly to pledges by Modi to grow India’s economy by boosting manufacturing and investment, eliminating corruption, creating new jobs and rolling out much-needed infrastructure, among other promises.

His party’s capture of an unprecedented number of seats will allow it to form and steer a government much more deftly that the previous Congress-led government, enthusiasts said. Deutsche Bank said today it expects the Sensex to hit 28,000 by the end of 2014, thanks to “a simultaneous revival” of investor, corporate and consumer confidence, and predicted India is “on the cusp of a structural bull market.”

imultaneous revival of investor, consumer and corporate confidenceRead more at:

imultaneous revival of investor, consumer and corporate confidenceRead more at:

Some individual investors are even more optimistic. “The Sensex will reach 30,000” in the next two or three months, Nityanand Shenoy, an investor and MD of a pharma company told FirstBiz. “A stable government will really boost the market.”

Whether Modi and the BJP government will be able to solve India’s complex problems, though, remains to be seen. Even before the votes were all counted on Friday, though, some warned the rally was unrealistic.  “The euphoria is overstated,” one investment adviser told The Wall Street Journal. “India is a big ship and it will take time to change direction.”


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