Indian stocks rose as votes from India’s general election indicated the leader of the opposition Baratiya Janata Party (BJP), Narendra Modi, would be the next prime minister.

The Sensex index rose 6% to a record 25375.63, before falling back to stand up 1.29% at 24121.74.

Both foreign and local investors are buying in the hope that BJP reforms will revive the Indian economy.

Mr Modi plans to revive economic growth in India by boosting investment.

By mid afternoon, local time, the BJP and its allies had gained 339 parliamentary seats of the 543-seat parliament, suggesting the most resounding victory by any party for thirty years.

Congress, which has been the dominant party in India since independence in 1947, is likely to be left with fewer than 50 seats.

India’s stock market has hit repeated highs this week as foreign investors placed their bets on a win by Mr Modi.

Asia’s third-largest economy has struggled with rising price pressures and problems with bureaucracy and corruption.

Desmond Chua from CMC Markets says investors are excited by the prospect of reforms.

“India’s Sensex has been on a relentless rally due to build in expectations of a positive election outcome, with opinion polls pointing towards a single coalition led by BJP’s Narendra Modi,” he said.

“In the event that we see anything else, especially in the case of a hung parliament, we can expect to see a deep correction after such a huge rally.”