Indian equity shares gained over 1 per cent on Friday, hitting their highest level in three weeks, as banking stocks surged on expectations from an industry meet underway, while a survey showing manufacturing activity expanded at its fastest pace in two years in December also boosted the sentiment.

The BSE benchmark Sensex surged 380.36 points to end at 27,887.90 and the NSE index Nifty rose 111.45 points to 8,395.45.

Sectoral indices

All BSE sectoral indices ended in the green with capital goods, banking, IT and power indices driving the rally. Among them, capital goods index was up 1.67 per cent, followed by banking 1.66 per cent, IT 1.2 per cent and power 1.17 per cent.

Gainers, losers

Major Sensex gainers were HDFC 4.07%, Tata Motors 2.83%, BHEL 2.83%, ICICI Bank 2.78% and Axis Bank 2.43%, while the major losers were M&M 1.03%, Reliance 0.38%, Bajaj Auto 0.32%, Hero MotoCorp 0.23% and HUL 0.16%.

Banking stocks advanced on hopes of faster reforms in the sector ahead of a one-of-a-kind two-day industry meet that has begun in Pune today.

Indian airline stocks gained today as oil marketing companies have cut jet fuel prices by 12.5 per cent. Jet Airways surged 4.8 per cent and SpiceJet rose 2 per cent.

The HSBC Manufacturing Purchasing Managers' Index (PMI) , compiled by Markit, rose to 54.5 in December from 53.3 in the previous month, its highest since end-2012, as new orders flooded in and factories kept price increases to a minimum.

Early trade

The benchmark BSE Sensex rose over 216 points in early trade on buying by funds and retail investors in banking, IT and oil stocks amid a mixed trend in Asian markets.

The 30-share index rose by 216.11 points or 0.79 per cent to 27,723.65 points with all the sectoral indices led by power, PSU and banking trading in positive zone with gains up to 1.1 per cent.

The barometer had gained 298.93 points in the previous five sessions.

The broad-based Nifty of the National Stock Exchange regained the crucial 8,300mark by surging over 60.55 points or 0.73 per cent to 8,344.55.

Brokers said continued buying by funds as well as retail investors, following push up in economic reforms by the government influenced the trading sentiment.

Global markets

A modest New Year rally quickly fizzled out on Friday after subdued manufacturing data from the euro zone and muted trading.

The pan-European FTSEurofirst 300 index was down 0.5 per cent by 0909 GMT, with benchmark indexes in France, Germany and Britain all reversing early gains after a survey showed euro zone output, new orders and employment all recorded sluggish growth at the end of 2014.

Stock markets in Asia were quiet with China, Japan, Thailand and the Philippines all on holiday. Australia's main index eased 0.2 per cent in early trading.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat, having ended 2014 almost exactly where it began - a pattern it has repeated for three years straight.

Wall Street also managed double-digit gains. While the S&P 500 ended Wednesday with a loss of 1.03 per cent, it was still 11 per cent higher for the year.

The Dow eased 0.89 per cent on Wednesday, while the Nasdaq dipped 0.87 per cent.

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