With all the results declared Monday in India’s General election, the Congress-led alliance won 262 seats, just 10 seats short of a parliamentary majority while the rival Hindu-nationalist Bharatiya Janata Party (BJP) won 159 seats, much less than it expected.

Prime Minister Manmohan Singh submitted his resignation Monday to President Pratibha Patil, a formality that sets in motion the process of forming a new government.

The President is expected to invite him to form a new government on Tuesday. In the interim, Mr Singh will continue as Prime Minister.

Markets in India were surged on the results of the election. The Benchmark Sensex at the Bombay Stock Exchange (BSE) surged 17.2%, or 2,099.21 points, triggering the upper-limit circuit breaker twice and shutting the market for day.

The 30-share BSE index closed early at 14,284.21 points, its biggest intra-day percentage gain in 17 years.

The rupee soared more than 3 percent to give-month highs against the dollar, marking its best one-day rise in more than a decade.

We believe the election verdict could be game-changing for India, as it enhances the scope for significant medium- and longer-term reforms that will boost sustainable growth, said Rajeev Malik, Singapore-based economist at Macquarie Securities.

While Congress fell short of forming the government on its own, Mr. Singh is expected to become the first prime minister to return for a second term since Indira Gandhi, who was assassinated in 1984.

Congress leaders will meet on Tuesday to officially endorse Manmohan Singh as prime minister, after which the party will meet its coalition partners to decide on potential new allies.