As was tentatively suggested last week, the market broke out to a new short-term high. Will the gains be sustained?

The resolution of the US “fiscal cliff” enabled the Indian market closing in the green for the second day. The rally saw the Nifty hitting an intraday high of 6,006, its best since 7 January 2011 and the Sensex scaling a high of 19,757, its best since 6 April 2011. As was tentatively suggested last week, the market broke out to a new short-term high. But the question remains whether the gains be sustained. The National Stock Exchange (NSE) reported a volume of 75.67 crore shares and advance-decline ratio of 1107:643.

The market opened on a strong note tracking its Asian peers which were in the positive in morning trade as the House of Representatives late Tuesday night passed the “fiscal cliff” bill by 257 to 167 votes, ending a dramatic New Year's Day showdown over income taxes and deep federal spending cuts.

The Nifty opened 32 points up at 5,983 and the Sensex started off at 19,693, a gain of 112 points over its previous close. After inching higher in initial trade, the benchmarks witnessed a minor bout of profit taking, which led the market to its intraday low. At the lows, the Nifty fell to 5,982 and the Sensex slipped to 19,687.

Brushing aside the initial hiccups, all-round buying led the benchmarks higher in morning trade. The gains were also supported by news that India’s manufacturing sector growth for December 2012 improved to 54.7 in December, up from 53.7 in November, registering the fastest pace in six months. The upmove helped the market hit its intraday high in noon trade. At the highs, the Nifty scaled 6,006 and the Sensex climbed to 19,757.

The indices pared a small part of their gains in subsequent trade and were seen moving sideways in the post-noon session. A positive opening of the key European markets kept the local market in the green till the end of the trading session.

The market closed in the positive for the second day in a row. The Nifty closed 42 points (0.71%) to 5,993 and the Sensex climbed 133 points (0.68%) to finish trade at 19,714.

Among the broader indices, the BSE Mid-cap index climbed 0.56% and the BSE Small-cap index surged 0.90%.

The top sectoral gainers were BSE Consumer Durables (up 1.65%); BSE Capital Goods (up 1.40%); BSE Oil & Gas (up 1.29%); BSE PSU (up 1.02%) and BSE Bankex (up 0.96%). BSE Fast Moving Consumer Goods (down 0.26%) and BSE IT (down 0.07%) were the only losers in the sectoral space.

Twenty three of the 30 stocks on the Sensex closed in the positive. The chief gainers were Bajaj Auto (up 3.07%); Maruti Suzuki (up 2.74%); ONGC (up 2.50%); BHEL (up 2.38%) and Sterlite Industries (up 2.19%). The main losers were Wipro (down 0.78%); ITC (down 0.61%); Mahindra & Mahindra (down 0.44%); Coal India (down 0.35%) and Hindustan Unilever (down 0.14%).

The top two A Group gainers on the BSE were—Gitanjali Gems (up 8.09%) and Videocon Industries (up 6.47%).

The top two A Group losers on the BSE were—Torrent Power (down 1.99%) and Colgate Palmolive (down 1.90%).

The top two B Group gainers on the BSE were—Aarya Global Shares & Securities (up 20%) and Ankit Metal & Power (up 20%).

The top two B Group losers on the BSE were—ArunJyoti Enterprises (down 9.93%) and Arcee Industries (down 9.72%.

Out of the 50 stocks listed on the Nifty, 35 stocks settled in the positive. The main gainers were Bajaj Auto (up 3.66%); Jaiprakash Associates (up 3.40%); Maruti Suzuki (up 3.28%); BPCL (up 3.14%) and IDFC (up 3.08%). The top losers were Asian Paints (down 0.97%); Bharti Airtel (down 0.65%); ITC (down 0.59%); M&M (down 0.54%) and Wipro (down 0.48%).

Markets across Asia closed mostly in the green on optimism from the US, ending weeks of uncertainty over the “fiscal cliff”. The uptick in the Chinese official purchase managers’ index for December, a sign of a pick up in growth, also supported the sentiments.

The Hang Seng jumped 2.89%; the Jakarta Composite gained 0.69%; the Straits Times surged 1.09%; the Seoul Composite climbed 1.71% and the Taiwan Weighted advanced 1.04%.  Bucking the trend, the KLSE Composite declined 0.84%. Markets in China and Japan were closed for trade today.

At the time of writing, the CAC 40 of France was trading 2.02% higher, the DAX of Germany surged 1.97% and UK’s FTSE 100 climbed 1.86%. At the same time, the US stock futures were trading with good gains, indicating a positive opening for US stocks.

Back home, foreign institutional investors were net buyers of shares totalling Rs665.04 crore on Tuesday while domestic institutional investors were net sellers of stocks aggregating Rs406.14 crore.

Emco today said it has got Rs458-crore orders from Power Grid Corporation for execution of a transmission line from Champa to Kurukshetra. The transmission line would be designed to carry 6,000 MW power from generating stations in Chhattisgarh to the Northern Grid. Emco jumped 6.94% to settle at Rs33.90 no the NSE.

Reliance Power today said it has synchronised the second 300 MW unit at Butibori thermal power plant in Maharashtra, taking the company's total operating capacity to 1,840 MW. The Butibori project, located near Nagpur, has a total capacity of 600 MW. The first 300 MW unit achieved full load in August last year. The stock gained 1% to close at Rs95.75 on the NSE.

L&T Finance Holdings on Tuesday said it has completed the acquisition of auto finance company Family Credit Ltd for Rs120 crore. Family Credit, which was a subsidiary of Societe Generale Consumer Finance, has presence across two-wheeler and auto financing, L&T Finance Holdings said in a filing on the BSE. L&T Finance Holdings closed 0.43% lower at Rs92.80 on the NSE.