With the election results pouring in and the Congress-led coalition taking a lead the Sensex slowly moving up, stockbrokers are glued to the television watching the which way the wind is blowing.

After a fall during opening, the Sensex did a turnaround and as of 1230 IST it had jumped 74 points to 5,432.

For investors who can't piece together what's on the mind of the market, rediff.com spoke to a few stockbrokers to find out what they feel investors should understand.

1. Stability is the most important factor for the stock market

The market does not care which party comes to power as long as there is stability in the government and a commitment to reforms.

"The market is looking for a strong and stable government. The Congress looks set to have a majority and form the government so in a way the uncertainty is over. That is important," says Rajiv Sampat, head of the equities division for Parag Parikh Financial Advisory Services.

• Results are out. Now what?
• India Votes 2004

The election manifestos of both the Bharatiya Janata Party and the Congress has shown that they are committed to reforms and stock brokers believe that there will be no looking back as far as liberalisation and economic reforms are concerned.

"The Congress started the reforms process and the BJP only took it ahead. Both parties are committed to the process. The only thing that we will have to watch out now for is the pace of the reforms," says Sampat.

A key thing to watch out for over the next two days is the combination that comes to power. Stockbrokers believe that a Congress-led coalition where the Left parties play a significant role could mean a slowdown in pace of the reforms. That could send a few shivers down the Sensex.

2. Volatility over the next few days

The entire process of government formation is going to send quite a few shudders down the Sensex' spine.

Almost all stockbrokers that rediff.com spoke to say that the Sensex is likely to react in unpredictable ways and swing wildly over the next few days.

"There is some amount of short positions that have been taken. While the uncertainty regarding the new government is over it is still not clear who will form the government and how quickly the reforms process will go ahead," says Kashyap Pujara, assistant vice-president, Sushil Finance Consultants.

3. Time to buy

Volatility means that prices of stocks of companies with strong performance and fundamentals have been pushed down.

For investors who are looking to enter the market, this could be a good time to pick up shares of many big companies cheap.

But this holds only for investors who are looking to be in the market for the long term.

"This definitely a good time to buy. Stocks are going cheap and for those who want to pick up a stake in the market this is the time to enter. But there will be volatility in the market so investors should not panic," says a stockbroker.

4. Fundamentals matter most

In the chaos surrounding the result and the process of government formation, investors could do well not to lose track of one thing: the fundamentals that drive the stock markets.

At the end of the day, what matters to the stock markets is not who is in power as much as how well corporate India performs. And India is certainly shining when it comes to the industry performance.

An increasing number of Indian companies can compete on a global scale.

Corporate performance in sectors like information technology, telecom, pharmaceuticals and banking has been excellent. The economy is sizzling and the gross domestic product is growing at a faster pace than ever before.

"The economy has a certain momentum going for it. Companies are doing well and investors must remember that in the long term, elections have no bearing on the markets. Markets only mirror the companies' performance," says Kashyap Pujara, assistant vice-president, Sushil Finance Consultants.