NEW DELHI: This past year proved to be the best for Dalal Street in three years of Modi Sarkar.Amid hopes of GST implementation, among other key factors, the BSE Sensex jumped 16 per cent in the 11 months of the Narendra Modi government’s third year in office.That compared with a 6.37 per cent fall in Modi’s second year in office and a 12 per cent rise in the first year. The Modi-led BJP government assumed office on May 26, 2014.So where will all the market action be in the final two years of this Modi government?If the Narasimha Rao regime of 1991 offers any cue, capex-linked sectors and consumer cyclicals should outperform the broader market in Modi’s final two years in office.“In the equity market, domestic economy sectors –particularly industrials/capital goods sectors – have seen a lot of action in the ‘final two years’ of every national government since the Narasimha Rao administration in 1991. This throws up some very distinct trends, consistently,” Deutsche Bank said in a research note.The biggest similarity seen during the final two years of every political administration since 1991 was the acceleration in government expenditure, led by capital expenditure, in the last two financial years.“Since the Narasimha Rao-led Congress administration, which heralded India’s reforms in 1991, till the Atal Bihari Vajpayee-led NDA administration and the Manmohan Singh-led UPA government, we have seen many similarities, particularly in the stepup in total government expenditure, led by capital expenditure, in the final two years of a government’s term,” the brokerage said.Capital goods production tends to pick up sharply in final two years of a government, Deutsche Bank said, adding that capex-linked sectors and consumer cyclicals show a tendency to outperform the market during this period.Thanks to pro-growth policies of the government and expeditious execution, the economy has managed to perform relatively better compared with its peers in the first three years of the Modi government.In fact, the MSCI India (dollar terms) index has consistently outperformed the broader MSCI EM index over the last two years of each of the past three governments, the brokerage said.“Given the consistency, it is highly probable that we will see the same trends play out over the next two years,” Deustche Bank said.The brokerage likes BHEL Hindustan Unilever , L&T and M&M and NTPC among the largecap stocks Besides, it also prefers RIL , SBI, Tata Motors and Vedanta.Among midcap stocks, the brokerage likes Jubilant Foodworks Shriram Transport and UPL.