Another factor that worked in favour of the bulls is the continuing flow of good second quarterly results. Asian markets too were higher today — the Hang Seng (up 3.54 per cent), Taiwan’s Taiwan Weighted (up 1.51 per cent), Nikkei (up 0.07 per cent), South Korea’s Seoul Composite (up 2.32 per cent) and Singapore’s Straits Times (up 1.45 per cent) edged higher. From a recent intra-day low of 17,171.45 touched on Monday, the Sensex has surged 1,321 points to reach the current 18,492.84. It is now 705.82 points away from the all-time high of 19,198.66 struck on October 18. The Sensex plunged over 1,500 points between October 17 and 19 after Sebi proposed curbs on PNs to moderate the copious FII inflows.

The market is expected to witness volatility in the coming days in view of several important meetings. The Sebi board is meeting on Thursday to decide on PNs. The RBI’s mid-term review of annual policy is due on October 30 and the US Federal Reserve Board meeting on October 31 will also be crucial as any Fed move on interest rates will drive the global markets.

Why Sensex bounced back?

•Speculation that foreign individual investors would be allowed to invest directly

•Big short-covering as last week’s sellers cover their positions

•Other Asian markets too moved up

What’s ahead?

•Sebi’s crucial meeting on Oct 25 to finalise PN norms

•RBI monetary policy on October 30

... contd.