According to BSE member Neel Dalal, after a correction of 50-100 points on Tuesday, the market is likely to scale a peak of 4,600. "A correction always comes ahead of a big leap," he adds.

"Although some of the FII deals were warehouse deals, the net FII purchases arestill very healthy and we may see the market rising by another 150-200 points in the short-term. They are buying now as the situation gets better on the border," said a fund manager. "The rally is beginning to get broad-based though it will take a week for a definite trend to emerge,'' he adds.

Ved Prakash Chaturvedi at SBI Mutual Fund says, "Liquidity inflows are very strong, primarily from the FII side. A strong impetus from these inflows will drive the market. With all the ingredients for a good economic growth, the medium-term outllok is very positive. The defining thing will be how the market reacts to political news with elections a few months away."

The software stocks had been "derated" by the market which shifted focus to the cyclicals. With cyclical stocks witnessing a sharp rise in the last one month, the focus was bound to shift to IT stocks. "There is still a lot of steam left in commodity and economy stocks and with software scrips just beginning to look up, we have a potent mixture for abig leap in indices," says an analyst. The two IT spearheads of Infosys and NIIT have a combined weight of around 8 per cent in the BSE Sensex.

However, a section of the market still believes that Kargil is just not over as yet. Any escalation in the ongoing war could trigger a sell off, thereby pulling down the market. "Developments in the last few days on the Kargil front are definitely positive though it cannot be totally written off as yet," says a BSE broker.

Adds Milind Karmakar at Dalal and Broacha, "Not everything is over as far as Kargil is concerned and it still depends on how things shape up on the border. In case market is discounting Kargil, it is premature."

With international pressure building on Pakistan and threats of economic sanctions, the market largely believes that Pakistan will eventually vacate its position in Kargil. "The second part of an IMF loan is due early next month and it remains to be seen whether Paksitan gets that loan. While economic sanctions can cripple thatcountry, we fail to realise that in a volatile and rudderless state like Pakistan, it can draw an hostile reaction," said a market participant.