As the summer vacation period came to a close, global equity markets returned to their obsession with monetary policy and in particular their speculation about the imminence of a Fed funds rate increase. In India, the RBI passed into the hands of a new governor, apparently set on a consistent course of policy. The markets traded steadily in the top half of the 8,000s with foreign buying providing a safety net. The Nifty added 207 points or 2.4% to reach 8780 after trading in a range of 5%. Average daily trading volumes rose appreciably, to $4bn, compared to a trailing average of $3bn. Foreign portfolio investors bought a net $437mil in cash equities while domestic institutions were net sellers of 461mil. Market breadth was strong, with advances outrunning declines by two to one. In the index options market, open interest expanded strongly at 9000 for calls while puts were concentrated at the 8600 level. Nifty futures are trading at a premium of 1.3% to cash.