Markets to trade with positive bias, support at 6000; 5980 - Consortium

At long last, the Nifty managed to surpass the sentimentally-important 6,000 levels while the Sensex neared the 20,000 milestone. The two main Indian indices reached levels last seen in January 2011, as investors continued to bet on a gradual economic pullback after a steep slowdown in 2012.

The RBI has made its intention clear to go for rate cuts in Q4 FY13 as it looks to complement the Government for the slew of positive policy measures taken in the last few months. Sentiment was also partly aided by a world-wide relief rally in the wake of US Congress' approval of the fiscal cliff deal. Such is the momentum in the Indian markets that investors have ignored even the continued weakness in the country's external account, dragged lower by a widening trade gap. Data on core sector growth and fiscal deficit front was also disconcerting but didn't make any dent in the overall market mood.

On the positive side, HSBC's manufacturing PMI for India touched a six-month high, while the services PMI hit a three-month peak. Markets were also perked up on media reports that the Government is preparing for another round of hike in regulated fuels.

The key Indian stock indices rallied to two-year highs this week, buoyed by strong FII inflows and successful completion of the US fiscal cliff deal. Positive data out of China also partly bolstered the sentiment. It may be recalled that the Indian stock indices have entered the New Year on a very upbeat note following a stellar 2012. The BSE Sensex and the NSE Nifty surged by more than 25% last year on the back of second-biggest FII inflows.

Indian equity benchmarks ended a tad higher on Friday, with the BSE Sensex and the NSE Nifty climbing for a fourth successive session. For the day coming by, global cues are flat to positive. Asian markets in early trades are not fully reflecting the upmove by the US and Europen marketsand are at best consolidating. However, FIIs flows in India continue to be extremely robout which may limit the downside.

Results season will kickstart fron Jan 9 when IDBI numbers will be unvailed. Mapping the options data , in Jan series for Nifty, Highest Call OI is at 6200 strike and highest Put OI is at 5800 strike.

On Friday, Nifty traded in red for major part of the session taking support at lower levels and finally managed to close above 6000 levels near day's high. Support at these levels will help Nifty to aim higher for 6100 levels.

Source : Equity Bulls

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