"The market direction is likely to remain positive going forward. We believe investors will be willing to give a premium for growth potential, especially as cyclical economic recovery starts manifesting in data points...therefore we maintain our Nifty target for end-2014 at 8000," UBS analyst Gautam Chhaochharia said in a note.

Stating that the Modi government has already unveiled a lot of reform initiatives, the UBS note said, "Concerns about government inaction are misplaced which in fact is more a case of unrealistic expectations...and we are starting to see initial signs of scepticism from the market about the government's apparent "inaction" or lack of big bang reforms. This is misplaced."

Stating that the Modi government has already taken many important steps in every major area, but they are ignored by the market, he said that expectations remain high and are arguably unrealistic as the government cannot address all problems at a go.

It listed ease of doing business, labour reforms, e-clearance of environmental and forest clearance, automatic production expansion licence to existing mines, widening of the scope of the Project Monitoring Group to include actual project implementation monitoring etc. as big steps.

UBS also listed the FDI in rail, insurance and defence as well introduction of real estate investment trusts (REITs) as big steps.