Modi's win wasn't a big surprise for the business community—which has watched his campaign closely for months— BJP's better-than-expected showing in the lower house of the Parliament was.
Experts told CNBC that the apparent mandate from the voters will make it easier for Modi to push through his economic reform policies. But, perhaps mindful of the way many economic "reformers" from India's past have fallen flat on their faces, India-watchers advise investors to gauge the country carefully before jumping in with feet first.
International market analyst John Krey of S&P Capital IQ told CNBC that any continuation of the Indian stock rally really depends on whether Modi delivers on his promise of economic reform.
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"Prime Minister Modi must show firm resolve to introduce market-based solutions for deregulating key industries—especially retail," he said. "In fact, his entire economic, political and regulatory reform program must be spelled out quickly and decisively. (Modi) can't afford to waste any time, or his regime will lapse into the same routine of all previous regimes since India achieved independence."
Jina Ventures founder and Managing Director Ron Shah said he's bullish on Indian stocks, at least in the short term.
"Yes, expect stock market euphoria through the week," he said. "Indian stocks have massive upside potential, especially the banks."