BSE broker Neel Dalal expects a small intra-day correction on Tuesday "but after that we will see the Sensex touching a new high of 4575."

Another BSE broker Dilip Bhat says the first quarter of the economy is strong. HCV and LCV production is up, commodity prices are firming, there is increased cement production and offtake. "With an improvement on the Kargil front, the market will continue to be firm," he says.

SBI Mutual Fund chief investment officer Ved Prakash Chaturvedi says the market will be strong in the medium term. "It will keep on reacting to fundamentals though volatility will continue on a daily basis. In QIcorporates are expected to give improved results compared with last year."

Sun F&C Mutual Fund fund manager Milind Nandurkar draws attention to the 29 per cent rise in excise collections, which shows a healthy growth in industrial production in first quarter. "On the border front, the issue seems of have receded to the back, even though Sharief will face a lot of opposition on his home turf. Back home, we have seen good monsoon, a good agricultural growth, low inflation and a revised GDP growth of 6 per cent are signs of a resurgent economy."

Despite Tuesday being the last day of settlement at NSE, brokers expect a firm market. "With positive news anticipated, short-covering will be seen on Tuesday. Wednesday is a crucial day, being the first day of settlement on the NSE. Overall, I expect the Sensex to gain 250-300 points this week," says Arun Kejriwal of Woodstock Securities. Adds a dealer with a borking house, "Long postions are likely to go up with four more days to go. The market should open with agap tomorrow."

Marketmen say while a number of scrips in no-delivery will aid the rise, there will be counter-specific action as first-quarter results begin to pour in. "The market has largely discounted the Kargil uncertainty with Monday's rise and a final ceasefire will further take the Sensex up. Now, it is back to the fundamentals of the economy. If the results are on the expected lines, we will see the onset of a major bull-run till the time the political news starts coming in," pointed out a BSE broker.

After last Friday's net purchase of Rs 118 crore by foreign institutions, players expect greater inflows with talks of peace on the Kargil front. "On Moday, FIIs made purchases at few counters but are expected to broadbase their buying shortly. Besides economy sensitive stocks, software counters are beginning to look good," said a dealer.

However, it remains to be seen whether the market will encounter any profit-booking immediately. "There is only talk of buying in the market but one has to bevery careful in this euphoria since profit booking will suddenly emerge from nowhere," added the dealer.

Technically, the Sensex is likely to face resistance at the 4325-level. "4325 is the next resistance level for the Sensex. Though it does not look like breaching this level, if it does, it will go to the 4600-level," says Kotak Securities vice-president Ambreesh Bagila.

Malay Sameer of Apple Financial Securities says the improvement in markets is less to do with the Kargil than the broader recovery of the economy. "The Sensex comprises of around 50 per cent commodity stocks and 50 per cent defensives. In the next 18 months, if the cyclicals move up by 50 per cent and if the defensives move up on an average by 18-20 per cent the broader market will be up by around 40 per cent. So, the there is good upside from the current levels". "The markets were shaken out of their stupor after a week of lacklustre trade. The Kargil issue was holding back the indices but it now seems the issue will be amicablyresolved in the next few days. The market undertone is very bullish and 4500-4600 level is likely provided there is no more hitch," said the head of a private-sector mutual fund.