What a difference three months makes. In September, India appeared to stand on the edge of catastrophe as rumours swirled of an International Monetary Fund bailout against a backdrop of currency free fall and investor panic.

But as 2013 ends, markets in Asia’s third-largest economy could hardly look more buoyant. India’s benchmark Sensex share index bounced back 13 per cent to hit an all-time high this week, perhaps the most dramatic turnround of any of the emerging nations buffeted by the US Federal Reserve’s “taper” plans this year.

Politics provided the latest boost as the Sensex touched a record 21,484 on Monday after a strong showing in state elections by the opposition centre-right Bharatiya Janata Party, led by Narendra Modi, prime ministerial candidate.

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