The Communists Are Out, India’s Market Soars

— India’s stock market surged an unprecedented 17%, forcing trade to close for the day, after the Congress Party’s definitive victory in national elections set the scene for long-delayed economic reforms. Within seconds of trading, the Bombay Stock Exchange’s benchmark Sensex vaulted 2,110.79 points, or 17.3%, to 14,284.21, triggering the historic shutdown Monday (see chart above). Infrastructure, banking and real estate companies led gains.

Putting to rest fears of an unwieldy coalition, the victory raised hopes of a revival in foreign direct investment and economic growth, as well as tax reform and significant infrastructure spending. The near collapse of India’s once powerful communist parties — which lost more than half their parliamentary seats — paves the way for long-awaited economic reforms, many of which the Left had blocked over the last five years.