Indian shares edged higher on Friday, posting their best weekly gain in more than four years, tracking gains in Asian markets and on improved risk appetite after the government unveiled a fiscally prudent budget earlier this week.
Investor sentiment has improved after the government stuck to its fiscal deficit target for the next financial year, raising hopes the central bank would soon cut key policy rates.
The 30-share BSE index Sensex ended higher by 39.49 points or 0.16 per cent at 24,646.48 and the 50-share NSE index Nifty ended up by 9.75 points or 0.13 per cent at 7,485.35.
Among BSE sectoral indices, metal index gained the most by 2.15 per cent, followed by PSU 1.94 per cent, banking 1.28 per cent and power 1.19 per cent. On the other hand, IT index was down 0.46 per cent, TECk 0.41 per cent and consumer durables 0.12 per cent.
Shares in state-run lenders rallied this week after the Reserve Bank of India said it would ease capital requirement rules.
Shares were hit by profit-taking after the S&P BSE Information Technology index gained 4.6 per cent this week.
Lenders such as State Bank of India and Punjab National Bank rose between 3 per cent and 6 per cent on Friday as the second edition of an annual bankers' conclave, 'Gyan Sangam', kicks off amid hopes government and financial institutions will outline the reform agenda for state-owned banks.
Top five Sensex gainers were BHEL (+4.03%), Coal India (+3.3%), State Bank of India (+3.23%), Tata Motors (+2.14%) and Cipla (+2.06%), while the major losers were Sun Pharma (-1.51%), Asian Paints (-1.48%), Maruti (-1.28%), L&T (-1.03%) and Bharti Airtel (-1.00%).
The gains have come amid an improving global market environment. Asian shares looked set to post their strongest week in five months after a string of positive US economic data and a bounce in oil and commodity prices.
But barring an expected rate cut from the Reserve Bank of India, traders anticipated markets to remain largely range-bound as the prospect of falls in global markets and crude oil prices could cap gains.
"Some consolidation is the need of the hour given the kind of run-up we had already seen," said Gaurang Shah, vice president at Geojit BNP Paribas Financial Services.
"Next week trigger will be in the form of a rate cut, if it comes through."
A report by SMC Global said: "Major Asian markets wavered between positive and negative today, largely ignoring another positive finish on Wall Street overnight. US stocks edged higher Thursday, rising for a third consecutive day, ahead of Friday's jobs report. US non-manufacturing index edged down to 53.4 in February from 53.5 in January, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to dip to 53.1. The modest decrease by the index was primarily due to a downturn in employment in the service sector, as the employment index dropped to 49.7 in February 52.1 in January."
European shares inched up on Friday as solid results at chipmaker Gemalto and firmer mining stocks kept equities on their recent upwards trajectory.
The pan-European FTSEurofirst 300 index, which had risen in five of the last six sessions, edged up 0.1 per cent, as did the euro zone's blue-chip Euro STOXX 50 index.
Asian shares looked set on Friday to post their strongest week in five months as global investors returned to riskier assets after a string of positive US economic data and a bounce in oil and commodity prices.
Wall Street moved higher on Thursday, adding momentum to a recent recovery as the energy and financial sectors emerged into positive territory for the year.