India stocks on the rise as vote count favors Modi win
AP and AFP
May 17, 2014, 12:06 am TWN
HONG KONG -- Indian stocks jumped Friday as preliminary results from national elections indicated the pro-business opposition had won a landslide victory. Other global markets were subdued following lackluster economic indicators.
Indian stocks have been rising since voting in the world's most populous democracy got underway six weeks ago. Investors have been anticipating of a victory for the Bharatiya Janata Party and its allies.
Narendra Modi, the party's candidate for prime minister, has campaigned on a pledge to revive economic growth amid widespread dissatisfaction with the ruling Congress party after a decade in power. Full results are expected later Friday.
A Modi victory is "very important for Indian politics, in part because of the much needed reforms" he is expected to implement, said Desmond Chua, analyst at CMC Markets in Singapore.
Reforms would help to improve the business climate in India, where growth has faded because competition has been stifled by rising corruption and elite families control large chunks of the economy, he said.
The Federation of Indian Chambers of Commerce and Industry applauded Modi's victory. President Sidharth Birla said the business group "hopes that this mandate will help the leadership restore much needed investor confidence, attract higher investments and generate employment."
The world's other stock markets were more subdued, with most other Asian benchmarks finishing flat or lower following a Wall Street sell-off after a batch of mixed reports on the global economy.
European stocks were steady in early trading, with France's CAC-40 down less than 0.1 percent to 4,443.91. Germany's DAX slipped 0.1 percent to 8,648.03 while Britain's FTSE 100 added 0.1 percent to 6,850.12.
Futures pointed to a slightly higher open for Wall Street. Dow futures crept up less than 0.1 percent to 16,422.00 and S&P 500 futures rose less than 0.1 percent to 1,867.70. The tech-rich Nasdaq eased 0.76 percent.
Tokyo fell 1.41 percent, or 201.62 points, to finish at 14,096.59 owing to a stronger yen and Sydney eased 0.58 percent, or 31.8 points, to close at 5,479.0 but Seoul edged up 0.16 percent, or 3.24 points, to 2,013.44.
Shanghai reversed morning losses to end flat, edging up 1.53 points to 2,026.50. Hong Kong eased ended flat, dipping 17.95 points to 22,712.91, capping off a six-day winning streak.