Indian stocks high on pro-business vote
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Bill Radke: Stock market up 17 percent in one day. That was the big news today in India. The super-rally came after a surprise landslide parliamentary victory over the weekend. The winning party favors free-market reforms. From Shanghai, Marketplace’s Scott Tong reports.
Scott Tong: Indian stocks jumped 10.7 percent this morning. That triggered a circuit breaker — a two-hour timeout for traders to calm down. They didn’t. The market surged up again, until regulators called it an early day, up 17.2 percent.
Rajeev Malik at Macquarie Securities says investors realize the weekend vote gives the pro-business party a dominant majority.
Rajeev Malik: It gives a much stronger mandate to a reform-oriented party in government to actually put in place the things that would move from merely good to a great economic story.
India’s the world’s largest democracy, but it’s often blasted as the slowest as far as economic reforms. Take foreign investment. India has longstanding barriers that Malik thinks will finally start coming down, and more American banks and insurance companies go in with their money.
Malik: Along with capital, you get knowledge. There’s a much better way of doing things.
India’s currency surged today, too — the rupee hit a four-month high against the dollar.
In Shanghai, I’m Scott Tong for Marketplace.
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