May 19, 2009
Post-Election Surge Shuts Down Mumbai Stock Exchange
By HEATHER TIMMONS
NEW DELHI — The Congress Party’s decisive victory over the weekend gave such a big lift to Indian stocks on Monday that it shut down the Bombay Stock Exchange for the day.
The main index in Mumbai, the Sensex, rose 10.7 percent in late morning trading to 13,479 points, triggering circuit breakers designed to curb wild swings in the index, while the National Stock Exchange’s Nifty rose 14.5 percent to 4,203.
The Bombay Stock Exchange was closed for two hours, but when it resumed trade, stocks extended their gains to 17.2 percent, hitting 14,272.63 points, which set off the final circuit breaker that halted trade for the rest of the day.
The Congress Party, led by Prime Minister Manmohan Singh, scored a big victory in national elections that ended on Saturday and is expected to usher through reforms and economic initiatives in the coming months. The party was hampered in the past by an alliance with the country’s Communist Party, which stalled business-friendly plans, including a nuclear deal with the United States, which was ultimately approved.
The Sensex is up more than 36 percent since the beginning of the year, thanks in part to foreign investors who are looking for better returns.
Morgan Stanley analysts on Monday raised their year-end Sensex target to 15,300 points, and said they expect Indian equities to outperform other emerging markets over the next 12 months.
Elsewhere in Asia, markets dropped on renewed concerns about the prospects for the global economy, which has shown signs of hitting a bottom. Still, analysts say that a recovery remains several months away.
The Nikkei 225 index in Japan dropped 2.4 percent, while South Korea closed 0.4 percent lower. The Hang Seng in Hong Kong fell 1.3 percent in afternoon trade, as the Shanghai market was flat, and Australia dropped 1 per cent.
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