Sonia Gandhi is PM-in-waiting
NEW DELHI, India (CNN) -- Italian-born Sonia Gandhi has won broad political support to become India's next prime minister, but stock and currency markets fell at the prospect of her governing in coalition with left-wing parties.
Thousands of supporters partied in the street outside Gandhi's home Friday, singing songs, beating drums and showering her with flower petals when the new power of a political dynasty made a brief appearance.
In one of the biggest shocks ever in a democratic election, Gandhi's Congress won the most seats in the 545-member parliament.
But her coalition fell short of a majority and she has had to lobby for new partners, especially the country's left-wing groups.
The country's financial markets, which at first welcomed Gandhi's big win as a sign of stability, plunged after a day of criticism by key communist leaders of economic reforms -- especially plans to sell India's inefficient and monolithic state firms.
Bombay's benchmark share index crashed more than 6 percent to its weakest close since November and the rupee ended at a four-and-a-half month low.
Sonia Gandhi was meeting with members of her Congress party Friday, setting the stage for the return of the Nehru-Gandhi dynasty, which led India to freedom from British colonial rule and then ran the nation for 40 years.
While working swiftly to build a new coalition government around her family's party, Gandhi has remained non-committal about whether she will be the next prime minister.
Congress MPs are due to meet on Saturday to choose their party leader, who would also be expected to head the new government. After the size of her win, Gandhi -- whose husband and mother-in-law once led India -- is the front-runner.
Definitely, she has emerged as the PM," said Congress general secretary Oscar Fernandes. She will be the first person not born in India to hold the job
The political maneuvering on Friday came after incumbent Prime Minister Atal Behari Vajpayee resigned in a stunning election turnabout, ending nearly six years in power.
Gandhi's Congress party and its coalition allies captured 279 seats on Thursday, enough for a slim majority in the 545-seat Lok Sabha, or national parliament.
The ruling Bharatiya Janata Party (BJP) and its allies won just 187 seats, as disaffected rural poor and young voters quit en masse, prompting the 79-year-old Vajpayee to resign.(Why the backlash?)
Vajpayee, who had been the favorite heading into the race, argued he deserved another five years in office because he had turned the economy around. (India under Vajpayee)
The prime minister gambled by calling elections six months early, confident that campaigning on the country's economic progress -- "India Shining" -- would carry him to a fourth term.
But Gandhi, along with her popular children Rahul and Priyanka, revitalized the Congress party, which was able to galvanize support among millions of poorer Indians in rural areas who have yet to benefit from Vajpayee's reforms.
About 300 million Indians live on less than a dollar a day.
The upset win sent Gandhi's supporters into a dancing frenzy on streets across India. ('Unreal' result)
Vajpayee had also forged a closer relationship with the United States, but in Washington, State Department spokesman Richard Boucher said any change of government would not affect relations between the two countries, including efforts to reduce tensions with Pakistan.
Sonia Gandhi, 57, is the widow of Rajiv Gandhi, who was prime minister from 1984 until 1989 and was assassinated in 1991 while trying to regain the post. (Gandhi: Fairy tale and tragedy)
The election was a mammoth undertaking. Balloting was conducted in four stages over three weeks to accommodate more than 650 million eligible voters. (Marathon election)
India's stock and currency markets initially dived over fears that no bloc would be able to form a government quickly, but they later rebounded.
--CNN New Delhi Bureau Chief Satinder Bindra contributed to this report.