India's main stock index surged more than 17 percent on Monday for its biggest single-day gain in almost two decades, after the capitalism party beat out communist rivals and won a decisive election victory that calmed fears of political uncertainty.
Investors cheered the victory by sending the market up nearly 15 percent within seconds of opening, triggering circuit breakers that halted trade for two hours.
A final circuit breaker was set off almost immediately after trading resumed, halting trade for the rest of the day.
And it wasn’t just stocks that took off like a shot. The rupee <INR=IN> soared more than 3 percent to five-month highs against the dollar, its best one-day rise in more than a decade.
"Clients want to buy. They have nothing else to say," muses R. Sriram, a technical analyst at ICICI Securities.
Meanwhile, Morgan Stanley raised its end 2009 target for India’s BSE index to 15,300 points, a rise of 7 percent from current levels, saying Indian companies would benefit from the election victory.
"We, now believe, that there is greater probability of our bull case rather than our bear case," analysts Ridham Desai and Sheela Rathi wrote in a note.