It’s not just BJP which is celebrating its domination across 4 states. Markets and Rupee seem to have joined this celebration as well. Sensex closed at a record high of 21,326 points after hitting intraday level of 21,484. This is 487 points higher than the previous day’s level. INR also was in a similar mood. It started the day at 60.83 versus the dollar and stayed at 61.13 (appreciated by 0.65) while writing this article.
A similar thing happened when UPA regained power in 2009. The reason for these rallies is that markets/investors like to invest in a stable environment. Experts now see BJP as a pro-reforms govt. FII’s are also expected to gain in confidence with these results.
These elections are being seen as semi-finals. Finals in the form of General Elections will be held in 2014. If BJP gains power in 2014, it would signal formation of a stable govt and hence cheer the markets further.