By Kenan Machado @kenanwsj
India’s stocks and currency swung sharply in the first hour of trading, taking attention from strong bank-fueled gains in Japan and Australia and the start of bitcoin trading on the world’s largest futures exchange.
The rupee briefly hit a three-month low versus the dollar and the Sensex stock benchmark in India fell as much as 2.6% as some reports hinted that Prime Minister Narendra Modi’s party may have fallen short in two state elections.
The latest results on India’s election commission website, however, pointed to a lead for Mr. Modi’s Bharatiya Janata Party in both states. The fact that the agency typically updates data with a lag doesn’t help to calm market nerves. But Indian media are now reporting the BJP has won the regional election in Gujarat state.
“It was certainly a wild ride there for a little bit,” said Stephen Innes, head of Asian trading at Oanda. “The initial read was wrong, with news pointing to too tight of an election. That spooked the market initially.”
A loss for the BJP could risk reining in Mr. Modi’s reforms, which have been unpopular at times, said the head of treasury operations at an Indian bank in Hong Kong.
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