On Thursday, Moody's re-election as Prime Minister of India is set to start the next five-year term. Thanks to this boost, India's stock market rose sharply, hitting a record high, and Indian rupee and bond prices also rose.

Moody's ruling coalition won historic elections_


In the afternoon of May 23, Beijing time, preliminary statistics show that Indian Prime Minister Modi will be given a second term of office.


New Delhi Television reported live on May 23 that the BJP led by Indian Prime Minister Narendra Modi had won 342 of 542 seats in the Indian Parliament and won an overwhelming victory as of 15:25 Beijing time, according to the results of the vote counting.


Despite the need for final confirmation by the Electoral Commission, according to the current votes, the re-election of Prime Minister Modi is a foregone conclusion. India's foreign minister and senior leader of the People's Party, Swaraj, also said on Twitter that the People's Party had won a "tremendous victory".


Modi's party won an absolute majority of votes, which will enable Modi to continue to push forward reforms to address unemployment and rural poverty that he has been in power for five years.


Moody faced pressure when he began his campaign. In December last year, he lost many local elections because of rising public anger over agricultural prices and unemployment. However, analysts say a suicide car bomb killed 40 Indian policemen in February in the disputed Kashmir region, which is in the interest of the right-wing BJP. Since then, the campaign has shifted its focus to the confrontation between India and Pakistan.


The vote in India's general election began on April 11 and lasted 39 days. According to the electoral calendar, the 23rd is the opening date of the general election. The counting begins at 8 a.m. local time and is expected to end later Thursday.

The number of registered voters in this election is 900 million, an increase of 84.3 million over the number of voters in the 2014 general election. Earlier reports indicated that India's elections this year are expected to cost $7 billion and are regarded as the world's largest and most expensive.


India's stock market breaks through 40,000 points in the session_

"Political stability and continuity are important factors for global investors, which will make India the focus of global equity investors," said R Sivakumar, head of fixed income at AxisMutual Fund.


With the victory of the Indian People's Party, the three cities of India's stock and bond exchange rose in unison.


India's stock market soared to a historic high, with the SENSEX index in Mumbai, India, hitting a record high of 4,044.96 points, before falling back. By the end of the day, it was down 0.7%.


India's NSE Nifty index rose 0.5% in the day to 11796.5, the first time it had reached a high of 12,000. The one-month forward of the Indian rupee rose 0.4% to 69.75 against the US dollar, while the Indian rupee opened 0.3% higher against the US dollar at 69.45. The yield on 10-year Indian government bonds fell by 6 basis points to 7.2%, the lowest level since April last year.


How did the election affect India's market performance? _


The bull boom of 400% in India's stock market over the past 10 years has caused many people to gasp.


According to Bloomberg Bloomberg data, from April 30, 2004 to April 30, 2019, the MSCI India Index achieved a total return of 62.3%, exceeding 308% of the Shanghai-Shenzhen 300 index and 209% of the MSCI global index and 263% of the S&P 500 index in the same period.


The Teda Manulife Foundation said Moody's Bharatiya Janata Party won 282 of 545 seats in 2014, the last general election, and only 427 of them in 2014. This is the first time in 30 years that a political party has been able to obtain more than half of the seats in the People's Court, which means that the Indian Party can form its own cabinet. Looking back on the past five years, Moody's government's amazing mobilization ability and reform achievements in various fields have nothing to do with their strong position in the People's Court.


The following chart summarizes the trend of India's capital market before and after the elections in 2014. It shows that the market expects the BJP's winning rate to rise and the elections to be finalized after May.


Teda Manulife believes that if we look back on the seven general elections since 1991, the median and long-term returns of the MSCI India Index rose five times after the results were announced, with an average return of 6.77% for three months, 12.26% for six months and 24.28% for twelve months. This shows that with the announcement of the results of the general election, the political situation in India is gradually clear and stable, and investors'expectations of economic growth will drive the market. Therefore, the early stage of the general election usually provides a better entry point.


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