MUMBAI (REUTERS) - Indian shares surged to their second consecutive record high on Monday as blue-chips such as Larsen & Toubro jumped on rising hopes that exit polls would show the Bharatiya Janata Party and its allies winning a majority in the elections.
The benchmark BSE index rose as much as 2.52 per cent to a record high at 23,572.88, while the broader NSE index rose as much as 2.35 per cent to a life high of 7,020.05, surpassing its previous record hit on Friday.
The optimism comes even as exit polls by media organisations - due to be released after 1830 India time on Monday (9:00 pm, Singapore time) once the last votes are cast - have proven unreliable in the past. Actual results for India's five-week long elections are due on Friday.
A win for a BJP-led coalition is widely seen as setting the stage for a revival in confidence, investment and growth as Asia's third-largest economy steers through a rough patch.
India's NSE index has surged 18.74 per cent since Narendra Modi became the BJP candidate on Sept. 13, as the opposition party is perceived by markets as being more business friendly at a time when the economy is growing at its slowest pace in a decade.
"Markets got a wind of exit poll showing a clear majority for the BJP-led allies, which got extrapolated as better growth prospects for India," said Mr Deven Choksey, managing director at K R Choksey Securities.
The BSE index ended up 2.42 per cent at 23,551, while the NSE index ended 2.27 per cent higher at 7,014.25, adding to their over 3 per cent gains on Friday.
Gains were broad-based, with 25 out of 30 listed companies on the benchmark BSE index posting rises.
However, risk was also seen increasing as NSE's volatility index, or India VIX, hit its highest intraday level since March 11, 2009, before ending 1.6 per cent lower.
Also on watch, consumer price inflation data due later in the day, the last one before the central bank's next policy review on June 3.
Domestic-oriented shares led the rally, with the NSE bank sub-index hitting a record high. State Bank of India Ltd gained 3.2 percent, while Larsen & Toubro Ltd rose 3.3 per cent.
Infrastructure shares also gained, with Ambuja Cements up 2.1 per cent, while state-run power equipment maker Bharat Heavy Electricals Ltd surged 2.4 per cent.
Reliance Industries Ltd gained 3.1 percent after the company and its partners in a gas block said on Saturday they were taking the Indian government to arbitration seeking implementation of higher gas prices.