Modi on the cusp of victory

Exit polls signal that Prime Minister Modi’s BJP and its coalition partners in the National Democratic Alliance have won India’s election. Admittedly, exit polls have been wrong in the past, not least in underestimating the strength of the BJP’s victory in 2014. We won’t know the official result until late on Thursday. But taken at face value, the polls indicate that the next government will be a stable coalition. This would set the stage for continued gradual reforms that would sustain rapid economic growth over the next few years. Markets have rallied on the polls: Indian equities surged by 4% to an all-time high yesterday. Further strong gains may now only come if the BJP is able to secure an outright majority.