In the last six months, BSE Sensex has traversed from 15,000 to surge past 19,200 points this Friday.  And before you blink, before Diwali, who knows the bellwether index of BSE would have crossed yet another milestone touching 20,000 points. 

Of course, any new peak to be conquered by BSE or any other bourse, won’t be free of bumps -- call it ‘swing’ or ‘volatility.’ 

A cursory glance at a point by point comparison of volatility levels of various emerging markets as collated and compiled by Morgan Stanley Capital International (MSCI) and ICICI Bank shows that the Indian market is far more stable than its peers. 

India, with a swing rate of 24 per cent, is among few emerging markets with least volatility, according to MSCI data.  In contrast, Turkey has a swing rate of 39.9 pc, Brazil has 32.6 pc while Russia with 32 pc and Argentina with 30 pc.

Traditionally, the level of volatility of Indian market used to be around 20 pc, but of late, it has spurred a bit due to sizeable inflows and other macro-economic factors. In this context, Ramachandran, ICICI Private Banking Group head (Global Research) says: “Market pricing models, regulatory framework, accounting standards and transparency have a bearing on the stock market volatility.”

Apart from the economic factors plenty of other factors also affect the markets. The stock markets are barometers of the economy and reflect the potential of the corporates listed on them, and the direction and health of the economy. If a country’s economy is doing well and expected to grow at a healthy rate, the market is usually expected to reflect that.