India's Sensex rallies post elections; polymer market upbeat

18 May 2009 12:21  [Source: ICIS news]

SINGAPORE (ICIS news)--The strong win by India's ruling Congress party in the recent elections has sent the country's benchmark stock market index, the Sensex, surging more than 17% on Monday, with expectations that reforms already underway would be accelerated.

The powerful rally in the Sensex followed the results of the country's general elections, with the coalition of Prime Minister Manmohan Singh securing 262 out of the 543 seats up for grabs.

The Sensex bucked the downtrend of regional bourses, hitting 14,272.63 before trading ended for the day.

The strong election turnout in favour of the ruling coalition provided it with a good advantage to push for reforms, market sources said.

"Construction and infrastructure will get a boost, with the Congress government expected to stay in power for the next five years, and this will mean improved demand for polymers such as polyethylene (PE) and polyvinyl chloride (PVC)," said a source from Reliance Industries.

Polymer traders said they were optimistic that consumer confidence would be bolstered, resulting in more spending in the retail sector.

"This will mean more demand for packaging, and thereby for PE and polypropylene," said a trader.

A PP converter said he was hopeful that with a stable government in power, the Indian rupee would touch new highs, helping end-users improve their margins.

Pearl Bantillo contributed to this article

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