India country-specific ETFs surged Tuesday, with small-cap Indian stocks leading the charge, as investors looked beyond the trade talks to a possible second term for Prime Minister Narendra Modi in the upcoming elections.
Among the leaders of the market on Tuesday, the iShares MSCI India Small-Cap ETF (NYSEArca: SMIN) rose 3.9%, VanEck Vectors India Small-Cap Index ETF (NYSEArca: SCIF) gained 6.2%, WisdomTree India Earnings ETF (NYSE: EPI) advanced 3.5% and iShares India 50 ETF (NasdaqGM: INDY) increased 2.9%. Both EPI and INDY also broke back above their long-term resistance at the 200-day simple moving average.
Fueling optimism in the Indian markets, many looked to the potential re-election of Prime Minister Modi in the upcoming election season, Economic Times reports.
Top Dalal Street names are confident that Modi will return as Prime Minister in the upcoming elections after the border scuffle with Pakistan. The border skirmish between India and Pakistan strengthened the popularity of PM Modi whom is viewed as a more stabilizing leader.
“A tough stance against a threat from Pakistan-based terrorists has won Prime Minister Narendra Modi praise from the Indian public, which in our view could translate into electoral gains for him and his Bharatiya Janata Party in national elections in May,” according to Abhishek Gupta, an economist with Bloomberg Intelligence.