The results of the four state elections held recently will be a major trigger for the Indian stock markets in the near-term, they added.
The BJP is set for a clear majority in Madhya Pradesh and Rajasthan, while in Delhi it is emerging as the single largest party. It is neck-and-neck with Congress in Chattisgarh.
"The state election results outcome would be positive for the stock markets in the long-run. Markets were expecting a 4-0 win for the BJP.
"Stock markets would definitely see a gap-up opening on Monday and may hit an all-time high level. Now, the next big trigger for the stock market would be the general election in 2014," said Paras Bothra, Research Head, Ashika Stock Brokers.
Enam Financial's Vallabh Bhansali however said that it is not a case that the market likes Congress or BJP government.      

The market actually likes a stable government, he said, adding that the market had complaints about the existing government because economic reforms were not moving.
BJP has given clarity about their leadership team which has helped them win over the market, Bhansali noted.
Besides, on the macro front, the industrial production data for October and Consumer Price Index (CPI) for November, key figures ahead of the RBI's December 18 policy review, would be announced on Thursday.
"Markets would open higher on Monday. Investor sentiment is at present positive. However, profit-booking may also happen at higher levels. People are at large looking for a Gujarat like model of government and growth in the country. This is the reason BJP has shown good performance in all the four states where elections held recently," said Gajendra Nagpal, CEO and Founder, Augment Financial Services.
Dipen Shah, Head, Private Client Group Research at Kotak Securities, said that in the immediate term, market movement would be determined more by the economic data in the US and the outcome of the elections.
That apart, the US unemployment rate fell to 7 percent in November, indicating better prospects for the economy.      

"Indian markets are under some pressure as strong economic data from the US markets is reinforcing the sentiment that the Fed might start its tapering process as early as this month," said Jignesh Chaudhary, Head Of Research at Veracity Broking Services.
The benchmark S&P BSE Sensex extended gains for the second consecutive week, during which it crossed the 21,000 mark. The 30-share index surged another 205 points to end at 20,996.53, a level not seen in nearly five weeks.
"On a broader basis, at current levels one should be cautious. The short-term euphoria may also be used to book-profits in certain sectors," said Milan Bavishi, Head Research, Inventure Growth and Securities.


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