May 20, 2019 / 4:00 AM / 4 months ago

Indian shares surge after exit polls show Modi victory

* NSE, BSE indexes jump as much as 2.5%

* SBI among top gainers on NSE

* IT stocks slide

By Arnab Paul

May 20 (Reuters) - Indian shares surged on Monday, a day after exit polls showed Prime Minister Narendra Modi would retain power with a bigger majority in the parliament, with financials leading the charge.

Exits polls, following the mammoth seven-phase voting, showed Modi’s National Democratic Alliance (NDA) projected to win between 339 and 365 seats in the 545-member lower house of parliament.

Despite facing criticism for weak job growth and farm prices, Modi turned the campaign into a fight for national security after tensions with Pakistan escalated earlier this year.

“I expect another 2-3% rally in the market in the next 3-4 days based on the cue,” said Samrat Dasgupta, a fund manager at Esquire Capital Investment Advisors.

“But once the results are out on Thursday, even if it is as expected, I don’t see much upside to the market.”

“The economy is passing through a rough patch because a lot of data indicators are showing a slowdown, so people will wait for announcements from the new govt/cabinet to see what policies will be made,” Dasgupta said.

The broader NSE index was up 2.22% at 11,660.45 as of 0347 GMT, while the benchmark BSE index was 2.31% higher at 38,807.88.

India’s NSE stock futures listed on the Singapore exchange , an indicator for the broader NSE index, was up 2.02% as of 0348 GMT, after rising as much as 2.76%.

Financial stocks led gains, boosted by Yes Bank Ltd , which was up 6.2%, and State Bank of India Ltd , which surged 5.4%.

The Nifty IT index was down 1%, dragged by Infosys Ltd’s 1.3% fall, as the rupee rallied. (Reporting By Arnab Paul in Bengaluru; editing by Gopakumar Warrier)

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