On a weekly basis, the Nifty has to hold 5,940 for the bullish trend to continue

The market settled in the green this week supported by the populist measures by government a decline in headline inflation numbers and a slew of positive third quarter results released by corporates during the week. The market will be driven by corporate earnings and global cues.

The Sensex climbed 375 points (1.91%) to 20,039, closing above the 20,000-level mark for the first time in two years, and the Nifty closed the week at 6,064, a gain of 113 points (1.90%). On a weekly basis, the Nifty has to hold 5,940 for the bullish trend to continue.

News of the government deferring the implementation of the General Anti Avoidance Rules by two years and December headline inflation falling to a three-year low enabled the market higher on Monday. Upbeat quarterly performance by TCS and gains in realty, banking and FMCG stocks boosted the benchmarks on Tuesday.

A bleak picture of the Indian economy painted by the World Bank and weak global cues led the market on Wednesday. The decision to allow oil marketing companies raise diesel prices in “small quantities” hiking the cap on subsidised LPG cylinders from six to nine saw the indices head higher on Thursday. Riding on the optimism of the oil & gas sector on the government’s reformist measures, the market closed in the positive on Friday.

BSE Oil & Gas (up 9%) and BSE Realty (up 8%) were the top sectoral gainers while BSE Auto (down 3%) and BSE Metal (down 1%) were the main losers.

The Sensex toppers were ONGC (up 16%), NTPC (up 8%), Bharti Airtel, Reliance Industries (up 7% each) and GAIL India (up 6%). The major losers were Mahindra & Mahindra (down 6%), Wipro (down 5%), Hero MotoCorp, Sun Pharmaceutical Industries (down 4% each) and Hindalco Industries (down 3%).

The chief gainers on the Nifty were BPCL (up 17%), ONGC (up 16%), DLF (up 14%), HCL Technologies (up 9%) and NTPC (up 8%). Mahindra & Mahindra (down 6%), Wipro (down 5%), Hero MotoCorp, Reliance Infrastructure and Sesa Goa (down 4% each) were the key losers on the index in the week.

Giving a big relief to overseas investors, the government on Monday postponed implementation of controversial GAAR provisions by two years to 1 April 2016. The decision to postpone the implementation follows the recommendations of the Shome Committee which was set up by prime minister Manmohan Singh in July last year to look into investor concerns.

Inflation based on wholesale prices declined to a three-year low of 7.18% in December, but it has failed to provide relief to consumers as retail prices rose to cross the double-digit mark in the same month. Retail inflation rose for the third successive month in December to 10.56%, driven by higher prices of vegetables, edible oil, pulses and cereals.

The government on Thursday partially deregulated diesel price allowing a hike of 40-50 paise a litre per month for retail customers and nearly Rs11 for bulk consumers. However, the Cabinet Committee on Political Affairs raised the cap on subsidised LPG to nine cylinders per household from six, bowing to public pressure.

On the corporate front, while TCS beat market expectations with a 26.7% jump in its third quarter net profit, Wipro declined as the company’s core IT services did not perform as expected. FMCG major ITC reported a 21% rise in standalone net profit on the back of strong performance in cigarettes, agri and paper businesses. Bajaj Auto fell on a decline in its operating margin for the December quarter and HDFC Bank was punished for a rise in bad loans in the December quarter.

Two-wheeler major Hero MotoCorp ended lower on its poor quarterly performance while Reliance Industries, after market hours on Friday reported a 24% jump in its Q3 net on earnings from its oil refining business.

On the international front, the Republican-controlled House will vote next week to permit the US government to borrow more money to meet its obligations, a move aimed at avoiding a market-rattling confrontation with president Barack Obama over the debt limit.