Indian (SENSEX) stock-index futures rose and rupee forwards gained as an exit poll showed the nation’s main opposition party was set to win four of five state elections to give it momentum ahead of national voting next year.

SGX CNX Nifty Index futures for December delivery added 1.2 percent to 6,273.5 at 9:42 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. fell 0.7 percent to 6,160.95 yesterday. The S&P BSE Sensex lost 0.7 percent to 20,708.71. The Bank of New York Mellon India ADR Index of U.S.-traded shares rose 2.9 percent. One-month NDFs on the rupee strengthened 0.9 percent today.

The Bharatiya Janata Party, which picked Narendra Modi as its choice for prime minister, is set to retain two states, take power from Congress in another and win the most seats in New Delhi, according to an exit poll yesterday. Modi, the chief minister of Gujarat state since 2001, has overseen annual economic growth of 10 percent on average and attracted investments by companies from Ford Motor Co. to the Tata Group.

“Indian stocks may see a temporary euphoria if the BJP does well in the poll,” Nilesh Karani, vice president at Magnum Equity Broking Ltd., wrote in an e-mail. “The excitement would settle as the economy is still not clearly giving any signs of recovery. The question still remains how will the economy benefit apart from the feel-good factor.”

The state polls are the final test for India’s two major parties before a national vote that must be held by May 2014. Goldman Sachs Group Inc. raised India to market weight from underweight on Nov. 5, saying the state polls may signal an opposition win in the federal vote, helping spur investment.

CLSA’s Favorites

Indian stocks should “react favorably” with cyclicals leading the rally, according to CLSA Asia Pacific Markets in a report yesterday. Its favorites include ICICI Bank Ltd. (ICICIBC), Axis Bank Ltd., Maruti Suzuki India Ltd., Larsen & Toubro Ltd. and Mahindra & Mahindra Ltd.

Gujarat-based companies have surged since Modi was named the BJP’s prime ministerial candidate on Sept. 13. A gauge of the shares, including Adani Enterprises Ltd. and DB Corp., climbed more than 10 times the benchmark S&P BSE Sensex’s 5 percent gain during the period.

Investors are speculating a Modi administration would help companies in the western state get faster government approval for projects in a country ranked last among the four largest emerging markets in the World Bank’s 2013 Ease of Doing Business Index.

Overseas investors have purchased a net $ 17.59 billion of Indian equities this year, the most in Asia after Japan, data compiled by Bloomberg show. They bought a net $ 1.1 billion of stocks in November, the third monthly inflow, the data show.

The Sensex has climbed 6.6 percent this year, the best performer among the four largest emerging markets, and trades at 13.5 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.5 times.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at

To contact the editor responsible for this story: Michael Patterson at