These macro factors (which have extremely negative in the previous quarters) have seen positive shifts (coincidentally in the last fortnight, give or take a few days). Whether they will have a bearing or not on market dynamics, depends if they'll sustain and needs to be seen over time.
1. The Nuclear pay-off
The 123 deal isn't just about global security and energy security for India. The word in economic circles is that it is also about financial security for major corporations in the nuclear tech/supplies space (and, in turn for the beleaguered US economy). Markets expect FIIs to react positively to this development going forward.
2. The political pay-off
UPA stays. Left is out, SP is in. The exit of Left leaves UPA with room to initiate long deferred finance/insurance/pension reforms and FDI in retail. Markets clearly see this a positive and it explains the rally post-vote (the biggest in some time).
3. Oil slide
From the peak of $147 per barrel, oil has shed $24 to tumble below $123 a barrel. That'll ease fuel led inflationary pressures. Experts suggest we may be nearing the end of the oil bubble. Oil at $100 a barrel isn't too far-fetched. Even if it stabilizes at these price levels, we could see inflation/interest rates stabilize.
4. Food looks good
We have had record production of food grains - 230 million tons. That'll ease food led inflation and consequently EMIs won't further eat into household budgets.
5. Good IT earnings
Contrary to expectations against the backdrop of a likely US recession, results of IT biggies have been fairly good (though guidance going forward is conservative).
The inclusion to this list (as posted in message 23):
6. House OKs US housing market rescue
After months of deliberation, an unprecedented rescue package has been voted in that could have a positive bearing on the battered housing market