Markets gain for 3rd straight session, end up 7.3% on week

Benchmark shares indices ended higher for the third straight session Friday, after lackluster trading in the first half, as a strong opening of European shares boosted the sentiment.

The Sensex ended up 363 points at 16,847 and the Nifty ended up 113 points at 5,050 .

For the week ended December 02, 2011, the Sensex and the Nifty were up 7.3% each.

Key European share indices such as London’s FTSE-100, Paris CAC-40 and Germany’s DAX opened over 1% higher in early trades on hopes of an encouraging US employment data, scheduled for release later in the day. They also rose on hopes of a solution to the euro debt crisis at the European Summit of the Heads of state and Government of the European Union in Brussels, scheduled for December 9, 2011.

Meanwhile, expressing concern over the rapid pullout of FII money, Finance Minister Pranab Mukherjee today said outflows driven mainly by the euro zone crisis are impacting the stock market.

"The current volatility in the stock market and withdrawal of FIIs have a direct correlation with the euro zone crisis, so it will have some impact, particularly on FII flows," Mukherjee said while addressing the Hindustan Times Leadership Summit.

Asian markets ended on a mixed note. The Nikkei average extended gains to log its biggest weekly advance in two years on Friday, though the mood was far from upbeat given uncertainty over whether Europe will next week manage to cobble together steps to counter the debt crisis there. The Shanghai Composite shed nearly 1% at 2,361 while the Hang Seng ended marginally up, at 19,040.

In the domestic market, gains were led by index heavyweight Reliance Industries, financial and technology shares.

Reliance Industries, which has the highest weight on both the indices, ended up 2% at Rs 811.

Technology shares rose on hopes of improving business environment in the US after encouraging economic data from the US Thursday. Most of the software exporters earn a major portion of their revenue from the US.  Infosys was up 1.7% and TCS was up 3.6%.

Interest rate sensitives such as banking shares rose on hopes that the RBI may pause from interest rate hike after food inflation showed signs of moderation.

State Bank of India, ICICI Bank and HDFC Bank were all up nearly 3.4% each.

In absolute terms, metal shares were up led by Tata Steel, Sterlite Industries and Hindalco Industries, having advanced over 3-4% each.

Meanwhile, Midcaps and Smallcaps extended the gains with BSE Midcap index having ascended by 1.4% whereas BSE Smallcap index rose by 1.1%.

The overall market breadth was positive as 1,756 stocks advanced against 1,031 declining ones, on the BSE.