Sensex hits record high on election results

<p>Narendra Modi is set to become India’s new leader.</p>

The Indian Sensex has continued to hit new record highs after it become clear Narendra Modi had won the country's general election.

Mr Modi's Bharatiya Janata Party (BJP) are believed to have racked up a comprehensive victory in the elections, with investors responding extremely positively to the news. The Sensex has been hitting new highs all week as the likelihood of Mr Modi becoming prime minister increase.

One of the reasons for this is that Mr Modi is strongly pro-business and investors have welcomed his plans to boost the Indian economy over the course of the next few years.

Following the latest exit polls coming out of India, there was also a strong rise in the value of the rupee, which rose to a ten-month high in comparison to the US dollar, BBC News reports.

Stocks up

The Sensex rose by more than four per cent yesterday (May 15th), reaching 24,956 at the open of trade on Friday. There was also a strong performance on the broader NSE share index, which also hit a new record after it rose by more than two per cent.

Prannoy Roy, the head of India's NDTV news channel, stated that it is clear from the exit polls to date that it will "undoubtedly" be a victory for the BJP and Mr Modi.

Desmond Chua from CMC Markets added that investors are becoming excited about the potential impact of the reforms Mr Modi has pledged to push through to boost Indian business after he becomes the country's new leader. Infrastructure and power upgrades are among the improvements believed to be at the top of Mr Modi's agenda for the coming years.

Mr Chua said: "India's Sensex has been on a relentless rally due to build in expectations of a positive election outcome, with opinion polls pointing towards a single coalition led by BJP's Narendra Modi. In the event that we see anything else, especially in the case of a hung parliament, we can expect to see a deep correction after such a huge rally."

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