The Sensex rose for a sixth straight session on Friday to a 11-week high, as foreign investors continued to buy local stocks on indication of a policy shift towards reviving growth, with an increase in global risk appetite also aiding sentiment.
Foreign funds have pumped in more than $1.5 billion into beaten-down Indian shares this month, in sharp contrast to net outflows of about $500 million in 2011.
Energy giant Reliance Industries and software exporter Infosys, which together contribute about a fifth to the benchmark index, led the rise. Reliance rose 3.7 per cent, while Infosys jumped 2.2 per cent.
The main 30-share BSE index closed 0.92 per cent, or 156.80 points up at 17,233.98, its highest closing level since November 9, with 16 of its components gaining.
“I think it’s because of loads and loads of liquidity and above that the Fed statement that probably they will keep interest rates low till late 2014,” said Jagannadham Thunuguntla, head of research at SMC Investments and Advisors.
On Wednesday, the Federal Reserve surprised financial markets by saying it expected to leave US benchmark borrowing costs at effectively zero until at least late 2014, considerably later than some investors had expected.
State-run Steel Authority of India Ltd rose almost 7 per cent after the country’s largest domestic steelmaker said it will spend about Rs 14,500 crore on capital expenditure in the next fiscal year, adding 5 million tonnes of capacity.
The 50-share NSE index rose 0.90 per cent to 5,204.70 points. There were about 1.8 gainers for every loser in the broader market. About 836.6 million shares changed hands. The benchmark has added about 11 per cent so far this year. It had shed nearly a quarter last year, making it one of the worst performers in the world.