A couple of days ago, Jubliant Organosys, was the Business Standard's 'Stock of the Day;' its share price hit an all-time high.

I don't know what the company does or how good its financials look.

What struck me was that its 182 per cent price rise followed a pattern that is now being exhibited by most rising stocks and has become increasingly evident in the last couple of months.

Unlike in the past, for most of the BS Stocks of the Day, increases in stock price to new high levels have been on trading volumes that are almost always way above the average volumes for the stock.

Anyone who cares to track this regular feature of the paper, will not fail to notice that the system seems to be of buying stocks on their breakouts above resistance levels, typically approaching a new high level.

As the stock market is breaking through its longish bear phase, growth style investing seems to be the dominating investment analytic in the market.

The rally is, therefore, intrinsically related to and betting on the real growth in the economy and not based on some 'theme' or 'story' as in the past.

It is not so much that the rally is broad-based per se, but that across the board those stocks are showing appreciation that have well-founded fundamentals.

As such, it isn't necessary any more to spin sexy stories to draw buyers into the market.

Everyone seems to know what the game is, so everyone starts off on a level playing field. This is a great comfort feel for the small but growing number of retail players who are currently participating in the small-cap rally.

Across sectors, most of the fastest rising stocks exhibit improved quarterly earnings per share, meaningful annual earnings growth, small capitalisation, volume demand, and low institutional sponsorship.

This has meant that the once-tenuous link between index blue chips and second-line small-caps has been re-established and is now possibly as strong as it has ever been.

These are the positive signs from the beginning of the rally. And these are more revealing than the low level of price-earning multiples across the board or that these are lower than bond multiples, which has been the case for some time now.

It is not the dominating characteristic of the rally, though it may have a bearing on its potential.

Which is why this rally may have a different relationship with recovery.  It's the health of the economy that affects stock prices, and not vice versa.

But this time round, the recent rise in stock prices may just be enough to refuel a fragile recovery.

Normally, day-to-day or week-to-week changes in the stock market have only a limited impact on the health of the economy.

Equity investments make up a relatively small percentage of the wealth of citizens, who count on wages, interest income, and other investments to cover living expenses.

Stock-market investments are generally regarded as long-term, and consumers more so in India, do not usually defer purchases because of fluctuations in stocks; stock markets are not so integrated a part of the average economic agent.

Of course, the recent spurt in share prices is being driven by what can be called a 'sentiment shift', a la Maruti IPO. This shift could prove to be strong enough to boost consumer confidence, which, in turn, would strengthen the 'recovery.'

A rising equity market, let's say, driven by a sentiment shift as we're seeing at the moment could affect the wealth of industry and consumers to such an extent that they spend more, and therefore there's greater demand in the economy and therefore a higher level of activity.

Which in turn, would seem to reinforce the rise that is being seen in the equity market.

But this is far-fetched and has never worked in quite the way in the past. Market upswings have neither engendered nor sustained an economic recovery.

The links are too weak and the effects too slow to be transmitted across the existing financial system.

It is an indirect linkage that may lead the way. Given low interest rates coupled with low inflation -- the textbook formula for economic growth -- the current stock price rise and especially its basis, as pointed out above, could act as the means of introducing some kind of an asset reflation that may redress the stagnation, if not downward pull, in asset markets that has kept investment trends depressed.

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