`More talks needed' on new Indian government

Congress party leader Sonia Gandhi said today that more discussions were needed before she could form a new Indian government, and she came away from a meeting without the president naming her prime minister.

Congress party leader Sonia Gandhi said today that more discussions were needed before she could form a new Indian government, and she came away from a meeting without the president naming her prime minister.

Gandhi said she had held “preliminary discussions on formation of the government” with President A.P.J. Abdul Kalam in New Delhi. She said she would meet him again tomorrow.

Asked when she would form a government, Gandhi said: “At the earliest”.

She said Kalam was “pleased to know about support” for a Congress-led government from inside and outside her alliance.

Neither she nor the president’s office commented on why Kalam had not named her as prime minister, since she controls the largest bloc in the new Parliament.

Normally, such a meeting culminates in an announcement of a new prime minister.

India’s stock markets opened sharply higher today on bargain buying after fears that the new government would slow or halt economic reforms caused a panic and the biggest one-day plunge in the benchmark index’s 129-year history.

Brokers estimate that India’s capital markets have bled some £25bn (€36.7bn) since Thursday, when Parliament election results showed Gandhi’s Congress party would be able to govern only with support from pro-labour, anti-privatisation communists.

The outflow culminated in what has been labelled “black Monday,” when regulators closed the markets twice in line with rules that require suspension of trading when stock values change more than 10% in a day.

The benchmark index of the Bombay Stock Exchange, the Sensex, rose 5% to 4,722.41 shortly after the opening today, while the Nifty index of the National Stock Exchange, the country’s largest, soared 5.6% to 1,466.10 points.

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