Uptrend to continue as long as the Nifty stays above 5,900
 

The market settled higher in the week, its best weekly performance since November, on the US budget deal and reports that the Indian government plans to hike diesel prices. Positive economic indicators also supported the upmove. Local investors will focus their attention to the December quarter earnings season for further direction to the market.

The Sensex closed the week at 19,784, a gain of 339 points (1.74%) and the Nifty rose 108 points (1.82%) to 6,016. The uptrend is expected to continue as long as the Nifty stays above 5,900.

The market settled lower on Monday amid range-bound and volatile trade on weak global cues as the world waited for a solution for US’ fiscal woes. Key benchmark surged on the first trading session of calendar 2013 after the US Senate approved an agreement early Tuesday to keep the world's biggest economy from falling off the fiscal cliff. Global optimism following the US budget deal enabled the market closing higher on Wednesday.

Gains in oil & gas, technology and IT stocks as well as global cues saw the indices closing higher on Thursday. A remarkable recovery in the last half hour enabled the market maintain its winning streak on Friday.

BSE Realty (up 5%) and BSE PSU (up 4%) were the top sectoral gainers while BSE Fast Moving Consumer Goods (down 1%) was the only loser.

The top performers on the Sensex were ONGC, BHEL (up 7% each), GAIL India, State Bank of India (up 5% each) and ICICI Bank (up 3%). ITC (down 2%) was the lone loser on the index.

The main Nifty gainers were Punjab National Bank (up 8%), ONGC, BHEL (up 7% each), BPCL and IDFC (up 6% each). ITC (down 2%), Lupin and Sun Pharmaceutical Industries (down 1% each) settled at the bottom of the index.

The HSBC India Services Purchasing Managers Index (PMI) for December stood at 55.6, up from 52.1 in the previous month, registering the fastest pace of growth in three months.

The HSBC India Manufacturing Purchasing Managers' Index (PMI)—a measure of factory production—stood at 54.7 in December, up from 53.7 in November. The December reading indicated the fastest pace of growth in the past six months.

The government may take a look at raising the cap on supply of subsidised LPG cylinders to nine per household in a year from current limit of six along with the Vijay Kelkar Committee recommendations to deregulate diesel prices by next year along with steep hike in cooking fuel rates.

The Kelkar Committee, which was appointed by finance ministry to suggest a roadmap for fiscal consolidation, had recommended an immediate hike in price of diesel by Rs4 per litre, of kerosene by Rs2 a litre and of LPG by Rs50 per cylinder.

In international news, the US 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. Had not passed, fiscal cliff would have resulted in increased tax rates for more than 98% of Americans.

Meanwhile, the minutes of the December meeting of the Federal Open Market Committee released on Thursday hinted at an earlier-than-expected end to its unprecedented bond buying programme. In September, in an unprecedented move, the Fed linked its bond buying programme to unemployment, pledging to continue the scheme until the US jobless rate falls to 6.5%, from the current 7.7%.