Overall condition of the Indian stock market

The market is behaving a bit unpredictably, with sudden ups or downs, even though the fundamentals have remained roughly the same. Many people would argue that this is exactly how the market behaved in the last few years, so this up and down is actually consistent. One needs to consider the different factors involved in taking the market up or down:
1. World wide market moves
2. Indicators of the recession worldwide and in India
3. Macro economic situation in India, such as whether monsoons will be good or deficient, whether the Government is hoping for a improvement in growth, changes in overall economic mood
4. Policy measures by the RBI or by the Government, such as interest rate movements, monetary and fiscal policies, disinvestment and reform, or the blocking of such reforms

5. Overall political scenario, where the Government is seen as stable, or too dependent on its allies and hence prone to instability
6. Influence of the Communists and Leftists
7. Overall sentiment, such as if the market has moved too much in the recent past, time for a correction, or vice versa
And so on, but these are the chief reason for the movement of the stock index.

Now, what is the current position. India is not in a recession, but growth is very sluggish and the monsoon shows every chance of being deficient in the northern states, leading to an effect on the economy. At the same time, the Government keeps on stirring up the path of policy reform from time to time, even when it is pumping huge amounts of money into poverty alleviation schemes, but without proper oversight (and hence spending more than it should normally do).
The market has moved up a bit, to almost 16K, and there are 2 contradictory advices coming in; one is that there are no fundamental reasons for the market to rise, and the other mentions that overall economy is looking better, realty is improving, production seems to be on an upward jump.
From my side, the mantra remains to be cautious, and look for opportunities.

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