Sebi cannot hang on to such restrictions indefinitely. The fire-fighting exercise of saving the market integrity is fine. But we now need to look beyond that. The basic problem is with FIIs' assessment of attractiveness or otherwise of Indian securities at this juncture. The Southeast Asian stock prices, too, have slid down and offer competition.

The solution to the present crisis lies in making the market attractive to investors, both domestic and foreign. For the domestic investor, Sinha could quickly announce reduction in capital gains tax. It can always be reviewed a year later. Buy back could await the review ofthe Company's Act. The government should show some indications that it is willing to tackle the economy in a realistic way. One signal could well be a tough stance towards unwarranted concessions for subsidies on poltical considerations. Another could be belt tightening in government expenditures. Such visible signals could bring the FIIs backs.

Beyond these measures there seems to be no alternative but to let the market find its own level. That bears will take advantage is a serious concern. But if they do so, they only take advantage of the dynamics of the economy. The secret is to remove the weakness in the economic scenario, real or perceived. Sebi would have to think over its alternatives carefully. With squaring up of short positions, the long positions are really built up. But how can the buying continue unless buying interest emerges further. We need to find buyers. Maybe the only way out is to selectively operate with the trading levers available.

Technically speaking, most scrips exhibitedtheir strength today. They have moved up from opening levels and come to the closing price of Monday, if not higher. ACC, Bajaj Auto, Colgate, Grasim, HPCL, IDBI, IPCL and ITC are showing a firm undertone. They are resisting a downslide in prices. The downslide in Sensex is more due to SAIL, Reliance and HLL. Reliance, BHEL and ICICI would do well to explain to their shareholders their view on company's prospects in the changed circumstances. That would help the market to take an informed view.

Software stocks have turned buoyant again. Pentafour, despite being available at 10 times p/e multiple appears to suffer from being in Harshad Mehta's stable. While the market undertone is firm, future movements will depend upon Sebi's initiatives.