Modi Madness Catapults India Stocks To Record Highs

India's Sensex stock index is climbing to record intraday highs early Thursday. It's up 0.62% today so far, sitting at 27,265.73 currently.

This might seem a little surprising: the US has just announced the official end to tapering, meaning no more new flows of QE. India's stock market was one of the emerging markets hit hardest by the mere suggestion of tapering in the first place.

But now, Indian equities seem to be going from strength to strength. At least part of the reason why is down to Prime Minister Narendra Modi:

The line just before the beginning of May is where the Sensex sat just before it became clear that Modi would not just win the mid-May Indian election, but that he would storm home with a large majority.

The Wall Street Journal has done a great timeline of the Modi-driven events that have lifted Indian stocks. Recently, announcements on diesel price deregulation and the continued success of the BJP (Modi's party) have cheered markets.

Of course, there's a big downside to this. If Modi starts to disappoint, the expectations investors had for significant earnings growth are going to sour quickly. Once you're up on a pedestal, there's much further to fall.