Given the fact that declines have been shallow, a move higher is likely. However, it may be a short upmove

Snapping its two-week decline, the Indian market ended the holiday-shortened week on a positive note on expectations that US policymakers would reach a last-minute agreement to avoid higher taxes and spending cuts, in the absence of which the nation would see another recession. Buying by institutional investors also supported the gains. Investors would focus on macro-economic indicators like current account data and manufacturing output numbers, which would be released next week, for further direction of the market.

The Sensex settled 203 points (1.05%) higher at 19,445 and the Nifty finished the week at 5,908, a gain of 61 points (1.04%). Given the fact that declines have been shallow, a move higher is likely. However, it may be a short upmove.

The market closed marginally in the positive on Monday on a minor recovery in late trade amid range-bound trade. Resuming trade after a day’s break on Wednesday, the market closed higher on firm global cues.

Selling pressure from IT, oil & gas, metal and technology sectors led the benchmarks lower on Thursday. Buying in oil & gas stocks after the government announced its intention to increase diesel and kerosene prices in a staggered manner resulted in the market closing near the day’s high on Friday.

All sectoral gauges settled in the positive with BSE Oil & Gas and BSE Realty (up 2% each) emerging as the top gainers.

The top Sensex gainers were Bharti Airtel (up 4%), Tata Motors, Wipro, Tata Power (up 3% each) and Bajaj Auto (up 2%). The chief losers were Jindal Steel & Power (down 2%), Mahindra & Mahindra, Hindustan Unilever, Cipla and Tata Steel (down 1% each).

The Nifty was led by Bharti Airtel, Tata Motors (up 4% each), Wipro, Tata Power and Axis Bank (up 3% each). The major losers on the benchmark were Grasim Industries, Jindal Steel & Power (down 2% each), M&M, Power Grid Corporation and HUL (down 1% each).

Diesel prices may have to be raised by Rs10 per litre over the next one year, and kerosene rates by same quantum over the next two years, if the government accepts recommendations of Vijay Kelkar Committee. The committee, which was appointed by the finance ministry to formulate the fiscal consolidation roadmap, had in its report, suggested raising diesel and kerosene rates to cut the Rs1,63,000 crore fuel subsidy bill.

In international news, US president Barack Obama appeared “modestly optimistic” after meeting top Congressional leaders and urged them take immediate measures to address the looming “fiscal cliff” before the 31^st December midnight deadline, in absence of which the nation faces the prospect of another economic recession.