The editorial "A new page?" appeared in the News International a day after Sharif and Modi met at New Delhi. Sharif along with other SAARC leaders attended the swearing-in ceremony of Modi Monday.
The daily said that Sharif's India trip for the inauguration of Modi was "in itself such a seismic event - the first time ever for a Pakistani leader - that it would have been unrealistic to expect any substantive breakthroughs".
"Instead, this was a battle for public relations and setting the ground for an improvement in relations further down the line. In this Nawaz excelled, particularly with the poignant touch of calling on former Indian prime minister Atal Bihari Vajpayee at his residence," it said.
Vajpayee's visit to Lahore to meet Nawaz is "still fondly remembered as a rare high point in Pakistan-India relations and served as a reminder to Modi that there is a history of the BJP (Bharatiya Janata Party) engaging Pakistan positively".
The daily noted: "The meeting between Nawaz and Modi hinted both at the prospects for peace and the likelihood of trouble in the months ahead. Nawaz focused, as he always has, on engagement but Modi spoke mostly of terrorism, particularly the Mumbai attacks of 2008."
The editorial went on to say that the way to work "through these troubles, as Nawaz well understands, is by engaging in other issues first and broaching matters of disagreement once ties have improved".
Indian Foreign Secretary Sujatha Singh expressed confidence that Pakistan would soon grant India Most Favoured Nation trading access. She also said that Modi has accepted Nawaz's offer of a return visit to Pakistan.
"In his own brief remarks to the press, Nawaz once again sung the song of peace. That the word 'peace' can even be uttered with the hardline Modi in power is in itself a testament to the surprising developments of the past few days," said the daily.
"A point to note was that the Indian side did bring up specific issues of concern but the Pakistani PM talked of our issues only in general diplomatic terms? While a measure of optimism is in order for this unexpected progress, we still need to be wary of likely challenges," the editorial said.
The News International pointed out that Modi's ideology "remains what it is and any attack in India is still sure to be blamed on Pakistan, with the inevitable recriminations to follow".
"If Modi does indeed visit Pakistan, which could be a very distant prospect, we can also expect a lot of hostility stemming from his actions during the massacre of Muslims in Gujarat."
"The commitment of the military to peace with India is also in question. The two leaders have done what no one expected but the chances of reverting back to script still remain high," it said.