Record levels in India's stock markets amid continued post-election euphoria have raised concerns over whether a correction is due, but analysts say the bulls' rein will continue for some time.
A raft of measures to revive Asia's third-largest economy unveiled at the government's budget last week are set to provide fresh impetus for the market, say strategists.
"The new government made a positive statement of intent. This should keep sentiment in the equity market buoyant," said Jitendra Sriram, equity strategist and head of research, India at HSBC.
The budget, which had a strong focus on fiscal consolidation and improving the investment environment, was the first major policy statement by the new government led by Prime Minister Narendra Modi. It was highly anticipated by investors looking for clarity on its longer-term vision for the economy.
Indian stocks have rallied 20 percent year to date, making them the best performing Asian market this year.
"The investment push in the budget both directly via government spending as well as tax cuts, together with higher FDI (foreign direct investment) limits in insurance and defense should augur well for the progression of the share of profits in GDP (gross domestic product), which is at multi-year low," Morgan Stanley wrote in a report, referring to the government's decision to raise the FDI cap for insurance and defense to 49 percent from 26 percent.