The BSE index rose 1 per cent on Friday and posted its third straight weekly gain, as State Bank of India surged on a smaller-than-expected rise in June-quarter bad loans, while a rally in crude prices also boosted energy stocks.
The benchmark BSE index closed up 292.80 points or 1.05 per cent at 28,152.40, posting a gain of 0.26 per cent for the week.
The broader NSE index ended 80 points or 0.93 per cent higher at 8,672.15, recording a fall of 0.13 per cent for the week.
Indian markets will be closed on Monday for a local holiday.
Shares of State Bank of India jumped 7.1 per cent, while Reliance Industries rose 2.1 per cent.
Domestic sentiment was also buoyed on continued buying by investors ahead of IIP and inflation data scheduled to be released later in the day.
US stocks closed at record highs on Thursday as surging oil prices and strong earnings buoyed investor sentiment, giving a boost to Asian markets.
Dealers said widening of positions by participants ahead of key economic data —— industrial production (IIP) for June and consumer price index (CPI) for July —— to be released after market closing today also added to the upbeat investor sentiment.
Among BSE sectoral indices, banking index gained the most by 2.03 per cent, metal 1.26 per cent, PSU 1.18 per cent and auto 1.07 per cent. On the other hand, realty index was down 0.48 per cent, IT 0.44 per cent,TECk 0.37 per cent and healthcare 0.08 per cent.
Top five Sensex gainers were State Bank of India (+7.16%), Axis Bank (+3.99%), Tata Motors (+2.58%), Power Grid (+2.24%) and Reliance (+2.22%), while the major losers were Infosys (-1.28%), Cipla (-1.26%), Sun Pharma (-0.88%), Asian Paints (-0.57%) and HUL (-0.28%).
FII buying
Sentiment also got a boost as foreign investors continued to buy Indian shares for a 24th consecutive session as of Wednesday, bringing the total net investments in the year to $5.33 billion.
But analysts warned of a correction in the coming days as a set of weak June-quarter earnings stoked valuation worries.
“It's a pure liquidity-driven rally, with foreign flows being the only catalyst now,” said Sanjeev Bhasin, executive vice president - markets at India Infoline.
“Valuations are looking very frothy and stretched, so correction will happen soon and that is what we think the second half of August will play out.”
Global markets
Asian stocks inched up on Friday, after a surge in oil prices helped propel Wall Street to record highs overnight, while Chinese economic indicators that missed expectations did not dent gains in mainland shares.
Japan’s Nikkei was up 0.72 per cent while Hong Kong’s Hang Seng gained 0.67 per in early trade today. China’s main Shanghai Composite Index edged up by 0.67 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.2 per cent. It was on track to gain 1.9 per cent for the week.
It was the first time since December 31, 1999 that the S&P 500, Dow Jones industrial average and Nasdaq had closed at record highs on the same day, according to Bespoke Investment Group.
The Dow Jones industrial average (DJIA) rose 117.86 points, or 0.64 per cent, to 18,613.52; the S&P 500 gained 10.3 points, or 0.47 per cent, to 2,185.79 and the Nasdaq Composite Index added 23.81 points, or 0.46 per cent, to 5,228.40.