HIGHLIGHTS: India Congress alliance set to win

NEW DELHI (Reuters) - Following are highlights from the vote count in India's general election on Saturday.

* India's Prime Minister Manmohan Singh's left-of-center coalition was heading for a second term after a clear victory in the general election, according to vote counting trends from the election commission.

Singh's Congress-led coalition, riding on the back of years of economic growth, did better than expected and will probably be only just short of an outright majority. That means it may find it easier to form a stable coalition with smaller parties.

* The main opposition Bharatiya Janata Party conceded defeat as the election returns came in. "The Congress has the biggest mandate," said senior BJP leader Arun Jaitley. "I think if Congress wants to compliment some of its leaders in this hour of victory, I think they're entitled to do so."

* The Congress party-led coalition was projected to win 254 of the total 543 parliamentary seats at stake, NDTV television projections said. BJP-led opposition was projected to win 162 seats.

To rule, a party or a coalition requires the support of 272 members of parliament.

* The "Third Front," a loose coalition of smaller parties spearheaded by the communists, was ahead in 60 seats, state-run Doordarshan TV said.

* The communists were trailing in the election including in the bastion state of West Bengal which they have ruled for more than three decades, projections said.

* Mayawati, the controversial chief minister of Uttar Pradesh who was tipped as a possible kingmaker, did not make significant inroads in her home state, which counts for the largest number of seats in parliament (80).

Mayawati's Bahujan Samaj Party, which relies mainly on support from India's former "untouchables," leads in only 22 seats. Congress leads in 20, a huge jump from the nine seats it won in the last election.

* The DMK and its allies, key Congress partners from the southern state of Tamil Nadu, was ahead in 25 of 39 seats in the state, according to Doordarshan TV.

* Congress party supporters, their arms in the air and carrying banners of star campaigners Rahul and Priyanka Gandhi, set off firecrackers in celebration in New Delhi on news of the election returns.

"Victory is ours, the writing is on the wall for the BJP and all the other parties that thought they could beat us," said Mukesh Narula, wearing a party flag as a bandana.

* ON POSSIBLE COALITIONS

CONGRESS WITHOUT THE LEFT?

"There is no compulsion for us to add a whole band of allies," Congress' federal trade minister Kamal Nath told Times Now TV channel, when asked whether Congress would ask the left for support.

"If we don't need the numbers, we don't need the numbers."

Prakash Karat, leader of the Communist Party of India (Marxist), said the country's biggest left party will not try to join a ruling coalition led by the Congress. "We will sit in the opposition."

* COMMENTS ON ELECTION VERDICT

VINOD MEHTA, editor of Outlook magazine: "So if you want to project from this, it looks like Congress will not only emerge as the single largest party but will be comfortably ahead."

KAPIL SIBAL, Congress spokesman: "Together with our alliance partners we will have a safe majority. I think it is a vote for secularism, secular ideology and a vote for stability."

AMBIKA SONI, Congress leader: "We had a positive program, with a positive manifesto for the next five years and the people have respected a transparent development-oriented government, which has inclusive growth for the people."

VENKAIAH NAIDU, senior BJP leader: "The trends are out, not the results. I do concede Congress seems to be having a clear upper hand as of now."

* MARKET ANALYSTS

SAMIR ARORA, fund manager, Helios Capital Management, Singapore: "This is a dream for the market. You could not have thought of anything better than this."

"The new government will not need the Left. Get ready for a 7-8 percent rally in the stock market on Monday. I don't expect them to do full-scale privatization. They will some shares in government companies but will not cede control.

"On reforms, what they were prevented from doing last time around, this time they will not be. So expect them to start off with some financial services and stronger pension reforms."

SHUBHADA RAO, chief economist, Yes Bank, Mumbai: "It will help them pick up the pace of reforms as like-minded parties form the government, lending greater stability and ability to carry out reforms at a faster pace. Market sentiment and business confidence will find support."

J MOSES HARDING, head of global markets, IndusInd Bank, Mumbai: "There is more clarity on who is going to win now. It is more or less a clear mandate. So it should be positive for all the markets. Congress has now to depend less on other parties.

"They can continue their focus on growth. The first half of the borrowing program should go smoothly. Foreign investors will likely come into India now. This should help the stocks and the rupee. There could be some problem with money supply growth, which could put pressure on inflation. That is the only negative, otherwise it looks positive on the whole."

(Compiled by Krittivas Mukherjee, Surojit Gupta and Matthias Williams)