Indian shares are seen digesting strong recent gains this week and waiting for corporate earnings to justify a sharp recent rally that lifted the market to record levels, brokers said.
Bombay's benchmark 30-share index closed at a life high of 6,119.59 points on Friday, taking gains in January so far to nearly five percent. The market surged about 73 percent in 2003, making it Asia's second best performer, after Thailand.
Analysts expect that general elections, due in the second half of 2004, will be advanced as the government seeks to cash in on a buoyant economy and peace moves with Pakistan.
Traders said the government's recent move to slash customs and excise duty indicated elections could be held earlier than expected. More such announcements were expected, they added.
"I would not be surprised if the government offers more sops," said Ashim Syal, chief investment officer at ING Investment Managers.
The Bharatiya Janata Party, which leads the ruling coalition, plans to announce this week early elections to capitalise on the booming economy. Party spokesman Pramod Mahajan told Reuters on Saturday that early elections were 100 percent certain.
India's economy, Asia's third largest, is forecast to grow by at least seven percent in the fiscal year to March. It expanded by a cracking 8.4 percent in the July-September quarter.
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