Hindu nationalist Narendra Modi is set to become India's next prime minister, exit polls showed on Monday, with his Bharatiya Janata Party (BJP) and its allies forecast to sweep to a parliamentary majority in the world's biggest ever election.

Indian elections are notoriously hard to call, however, due to the country's diverse electorate and a parliamentary system in which local candidates hold great sway. Pre-election opinion polls and post-voting exit polls both have a patchy record.

Modi has electrified the lengthy contest with a media-savvy campaign that has hinged on vows to kickstart India's economy and create jobs.

Yet much depends on Modi winning enough seats to form a stable government that will allow him to push through his promised reforms.

India's staggered voting, spread over five weeks to reach the country's 815 million voters and move security forces around its varied terrain, ended at 1800 IST (1230 GMT) on Monday. Results are due on May 16.

Research group C-Voter predicted 289 seats for the National Democratic Alliance headed by the BJP, with just 101 seats for the alliance led by the Congress party - which would be the ruling party's worst ever result.

Another poll, by Cicero for the India Today group, showed the NDA hitting between 261 and 283 seats. A majority of 272 is needed to form a government, although that is often achieved with outside support from regional parties.

Several national exit polls over-estimated the BJP's seat share in the last two general elections in 2004 and 2009. The ruling Congress party went on to form coalition governments on both occasions.

"We will only know if this 'Modi wave' has really happened after the election results," said Praveen Rai, a political analyst at the Delhi-based Centre for the Study of Developing Societies (CSDS), who published a report on exit polls last month. "It still might be more of a media wave, a manufactured wave."

CSDS has put together a survey canvassing voters at least a day after they cast their ballots that was due to be released by the CNN-IBN news channel later on Monday.

BULL MARKET

Uttar Pradesh, India's most populous state and a crucial political battleground, is particularly tricky for pollsters to forecast because it is a caste-sensitive state where some voters are afraid to speak frankly about who they chose, said Rai.

C-Voter said its poll was based on a sample of 166,901 randomly selected respondents in all 543 seats up for election. The pollster said its margin of error is +\-3 percent at a national level.

India's stock markets have in recent days hit record highs on hopes that the exit polls would show the BJP and its allies winning a majority.

The Nifty breached the psychologically key level of 7,000 points for the first time on Monday, breaking a record high of 6,871.35 that it hit on Friday.

The benchmark BSE Sensex also hit an all-time high and the rupee rallied to its strongest levels in 10 months on Monday.

Should Modi fall short of a majority when the results come in on May 16, he will need to strike a coalition deal with some of India's increasingly powerful regional parties.

Modi is a polarising figure whose critics accuse him of turning a blind eye to religious riots in 2002 in the state of Gujarat, where he is chief minister. More than 1,000 people - most of them Muslims - were killed in the violence.

Modi denies the accusations and a Supreme Court inquiry found no evidence to prosecute him. - Reuters