Narendra Modi's thumping election victory is dividing analysts on rupee

Nomura says Modi's win assures policy continuity and stability craved by investors, which in turn will lead to increased capital inflows

Prime Minister Narendra Modi's thumping election victory is dividing analysts on India’s rupee.

Citigroup Inc. is positioning for a weaker rupee using options after the currency’s recent outperformance, while Nomura Holdings Inc. expects the sweep of Modi’s win to attract robust overseas flows to the nation’s assets, giving another leg to the rally.

Investor sentiment turned positive last week -- the rupee gained one percent and stocks rose to records -- after Modi swept to a comfortable victory as predicted by nearly all exit polls. With election outcome settled, markets are now looking to see how the government tackles slowing economic growth.

“Election