MUMBAI: Leading foreign brokerage CLSA said the recent stock market surge was be cause of the perception

that the BJP will win the next elections, while allowing that this may also have something to do with the receding of fears related to t he withdrawal of the US Federal Reserve's stimulus programme. "Part of this rally relates to the end of tapering neurosis, but part also relat es to growing hopes that BJP prime ministerial candidate Narendra Modi can win t he pending general election which has to be held by May next year," Christopher Wood, chief equity strategist, CLSA Asia Pacific Markets, said in the "Greed & F ear" report on Friday, joining Goldman Sachs in echoing such a sentiment. In the past 11 weeks, the benchmark Sensex has risen 16% in rupee terms from its 11-month low on August 21. The index is up 24% in dollar terms. On Wednesday, Goldman Sachs upgraded India's rating to 'Market Weight' from 'Und erweight' on the expectations of a BJP-led government winning the 2014 elections . Goldman, however, clarified on Friday that it hadn't been stating its own pref erence or position on the election's outcome. Opinion polls have shown that the BJP-led National Democratic Alliance coalition could win anywhere between 187 an d 195 seats in Parliament. "A test of Modi's momentum will be election results in four states which are due on December 8. The BJP wave is apparently clear in three of these four state as sembly elections Rajasthan, Madhya Pradesh and Chhattisgarh,'' the report said. "Perhaps more interesting than the polls, which are notoriously unreliable in In dia, Modi is reportedly to be drawing six to eight times the crowds that Congres s chief election campaigner Rahul Gandhi has been attracting in the past few day s," said Wood. "Crowds are so eager to see the charismatic Modi that they have e ven been paying to see him speak.'' But the report is also cautious on Modi as polls are six months away. "If the Mo di momentum is for real for now, the problem for him is that it is still six mon ths from the national election. The reality is that (as) his electoral prospects rise, the greater the sense of economic crisis and the weaker the rupee," Wood said. "In this sense, the stock market bounce and recent rupee stability is not in his political interest. Still the Gujarat chief minister should not be overly conce rned since there remains no evidence of a turn in the investment cycle, and the current account deficit remains a large 5% of GDP. This is why the recent stock market rally is on fragile ground," the strategist said.