Buoyed by an impressive general election victory, India's ruling Congress party began cobbling together a coalition cabinet on Monday as financial markets soared on the prospect of a stable government. Reformist Prime Minister Manmohan Singh, whose coalition is just 10 seats short of a parliamentary majority, submitted his resignation to the President Pratibha Patil, a formality that sets in motion the process of forming a new government. Hopes for a stable government at the center buoyed India's main stock index, which shot up more than 17 percent in two very brief sessions, triggering the upper-limit circuit breaker and halting trading for the day. 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 potential new allies. Congress party's strong showing means it will almost certainly retain the key ministerial portfolios, including finance, trade, defense and foreign affairs. Congress sources said Palaniappan Chidambaram could retain his home (interior/security) portfolio. But the finance ministry was a toss-up among pro-reformers including C Rangarajan, Montek Singh Ahluwalia, Trade Minister Kamal Nath, and Foreign Minister Pranab Mukherjee.
