Amid speculations of a Narendra Modi-led NDA government, the BSE Sensex and the NSE Nifty have soared to new all-time highs of 25,014.85 and 7,459.40 points respectively.

As the counting of votes for 543 constituencies has begun, it’s clear that a BJP-led alliance may come to power with 250-280 seats. This has lifted the key indices to new highs.

Besides, appreciating rupee which soared to a fresh 10-month high gained 2.3 percent this week and 1 percent today to 58.68 per dollar, as of 11 am.

Expectations of a turnaround in the economy are huge if Modi comes to power According to P Phani Sekhar, fund manager (portfolio management services) at Angel Broking, “the infrastructure-related stocks have been performing really well recently in the hope that Modi will come to power. They expect that with a stronger and more decisive person at the helm of affairs, the pace of infrastructure development will quicken in the country, just like it did in Gujarat”.

He adds that since Modi has been projected as a pro-business leader, the industry is also hopeful that they will get more relaxations like reduced excise duty so that there is a revival of business growth. Asked about the turnaround in manufacturing sector, Sekhar says while the industry hopes robust infrastructure facilities will be created, it is also well aware of the difficulties Modi may face in negotiating with states. “That is going to be a tricky area for BJP,” he warns.

On macroeconomic policies, he suggests BJP would prioritise growth over inflation as it seems to back the theory of supply constraints being responsible for inflation. ‘Going by the NDA government’s track record, BJP will be more inclined towards fiscal consolidation. It would look to rationalise certain subsidies to make room for capital expenditure to drive growth.”