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India polls: What if Modi falls short? Some market players brace for shocker

Published on May 9, 2014 7:40 PM
The television screen on the facade of the Indian Bombay Stock Exchange (BSE) building features Chief Minister of the Indian state of Gujarat and Bharatiya Janata Party (BJP) prime ministerial candidate Narendra Modi, in Mumbai on April 22, 2014. -- FILE PHOTO: AFP

MUMBAI (REUTERS) - Indian markets are so confident the opposition party led by Narendra Modi will win the country's elections that brokers fear anything short of a decisive victory could spark the worst sell-off in years.

Shares hit a record high on Friday as opinion polls pointed to a sweeping win for the Bharatiya Janata Party, seen as more business friendly than the rival Congress party.

But caution about the vote results may prove warranted. Most investors were caught off guard in the past two general elections - in 2004 and 2009 - as opinion polls got it badly wrong.

Now some precautionary moves are being made. Customers say at least four brokerages have raised margin requirements due to concern there could be intense volatility after election results are unveiled on May 16.

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