Indian stock markets were expected to rise on Monday after the Congress-led UPA alliance was re-elected in a surprise outcome. Analysts believed the election results ensured policy continuity and a more reform-oriented government. The markets had already risen over 300 points on Friday anticipating a stable government. Analysts predicted the markets would see further gains of 8-10% as investors welcomed the clear mandate without interference from left parties.

1. Indian markets expected to rejoice surprise electoral outcome
Hoping for continuity in governance, stock markets in India are expected to rejoice Monday as the
United Progressive Alliance (UPA) looked all set to return to power, after election results Saturday
handed huge unexpected gains for the Congress-led coalition.
Hoping for continuity in governance, stock markets in India are expected to rejoice Monday as the
United Progressive Alliance (UPA) looked all set to return to power, after election results Saturday
handed huge unexpected gains for the Congress-led coalition.
'The results will certainly have a positive impact on the markets as they were hoping for stability in
the next government,' said Arvind Mahajan, executive director with leading global consultancy
KPMG.
'Given that Left support may not be required this time, the Manmohan Singh government is
expected to be more reformist than in the past,' Mahajan told IANS Saturday, referring to constant
roadblocks when the Left parties were supporting the UPA from outside.
The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) had already gained
over 300 points, or 2.53 percent, Friday - the last trading session before the weekend break -
anticipating a stable government.
And with actual results showing much better poll performance by the ruling alliance and strong
numbers for the Congress, sentiments were expected to remain positive Monday when trading
resumes, said analysts.
'This is a clear mandate. The markets couldn't have asked for anything better. Now the government
can continue with its economic policy without interference from the Left,' said Jagannadham
Thunuguntla, equity head at SMC Capitals.
In the run-up to the counting of votes, Friday had seen 12 out of the 13 sector-specific indices of the
BSE end in the green, even as 25 out of 30 Sensex scrips closed with handsome gains.
Data available with the BSE also showed that unlike the past two elections, when markets had
tumbled, the Sensex this time actually gained during the month-long run-up till Friday - up 1,226.02
points, or 11.2 percent, since April 16.
In October 1999, when the National Democratic Alliance (NDA) had returned to power, the Sensex
fell 7.5 percent on fears that then prime minister Atal Bihari Vajpayee may not be able to hold the
new coalition together.
Similarly in May 2004, on the eve of the UPA taking over the reins, the key index plummetted 15.7
percent as investors were rattled that the NDA - which by then was seen as investor friendly - would
not return to power.
But this time the markets did not slip, though the sentiments remained cautious. And looking ahead,
analysts felt the outlook was positive, although they also maintained that fundamentals will
eventually play the decisive role.
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2. 'Since past few weeks, the markets were in a no-trading zone, moving in a tight range. But now
there should be a breakout on Monday,' said Neera Jain, chief technical analyst at stock analyses
firm CRN India.
'At this moment the markets are in an uptrend. Stocks are expected to further rise on Monday.'
Thunuguntla said it would take a little time for the markets to digest the news. 'But a bounce can
certainly be expected. In the next coming days, it will not be surprising to see anywhere between an
8-10 percent jump in Sensex.'
- James Jose
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© Copyright 2006 India PRwire Pvt. Ltd. All Rights Reserved.
India PRwire disclaims any content contained in press releases published on IndiaPRwire.com. Issuers of press releases are solely responsible for the
accuracy of their content.