The Indian economy extended its long slump in the quarter ending in September with lower-than-expected growth at 5.3 percent keeping it on track for its worst year in a decade.
Markets will closely track the vote on foreign investment in multi-brand retail in parliament and manufacturing PMI for November next week. Market participants say stocks may extend gains if the vote goes in favour of the government.
"It really depends on the Parliament vote now. If it goes through, there will be a boost to confidence. If it doesn't, it may indicate less aggression on reforms from the government," said Sonam Udasi, head of research at IDBI Capital.
The 50-share NSE index gained 0.94 percent, or 54.85 points, to 5,879.85, its highest close since April 21, 2011, also adding 4.5 percent for the week.
Both the indexes have posted their best weekly gains since the week ending June 8 on rising expectations of reform and measures to contain India's twin deficit and FII inflow along with Moody's stable outlook on India and after Goldman Sachs upgraded Indian equities.
Andrew Swan, who manages about $3 billion as the head of Asian equities for BlackRock, told the Reuters Global Investment 2013 Outlook Summit on Friday that Indian politicians will push reforms and economic growth will tick up.
State Bank of India rose 1.8 percent and Punjab National Bank
Indian banks have seen a pick-up in demand for credit since the beginning of the festive season in October and are confident of meeting the central bank's projection for the fiscal year ending in March 2013.
Recent underperformers, that missed the week's rally, gained on Friday. Shares of Oil and Natural Gas Corp (ONGC) rose 4.4 percent, while capital goods major Bharat Heavy Electricals Ltd
South Africa on Thursday awarded a $667 million contract to supply life-prolonging HIV medicine to 12 international and domestic firms, including Cipla Medpro, to deal with its biggest health problem.
Bharti Infratel Ltd, the telecommunications tower unit of Bharti Airtel is set to raise up to $825 million next month in what would be the country's biggest initial share offering in two years.
Shares in HCL Technologies Ltd
However, among the stocks that fell, shares in Idea Cellular dropped 2.4 percent on profit-taking after rising 16.12 percent in November as of Thursday's close, versus a gain of 3.6 percent in the NSE index.
Dealers say the reduction in regulatory uncertainty after lower-than-expected receipts in the 2G auction helped the stock gain in November but it is priced in.