Analysts cautioned that the rally in markets will now need to be justified, and a series of key tests will loom for the new government led by Narendra Modi, including most immediately, the selection of a cabinet. Other critical areas for investors include the new government's relationship with a central bank focused on inflation and the need to deliver a budget that can reassure markets and credit agencies about the fiscal deficit. The next 100 days will be critical for the next government to revive the investment climate says SAchin Karpe. Buying is broad-based as the mid cap and small cap indices and all the sectoral indices are moving up. The market had a huge run ahead of the election results and in the past one week Sensex has gained over 2500 points. The strong market gains come less than a year after the country was gripped by its worst currency crisis since the balance of payment crisis in 1991. Investors will now expect the BJP to deliver. Most immediately a Modi-led government is expected to soon name key cabinet posts such as the finance ministry, which is widely seen as going to Arun Jaitley, a senior BJP leader.
The BJP will also need to deliver a budget that investors hope will be more realistic than the one unveiled by Congress party in February, which tips the fiscal deficit at 4.1 percent of gross domestic product for the year ending in March 2015. Analysts warned that the market gains could be at risk should the BJP end up disappointing investors. Infrastructure-
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