Sensex up 38.72 points

The BSE Sensex rose on Friday to their highest close in more than a month, extending gains for a second consecutive session on hopes that state elections results on Sunday will show strong support for the main opposition party ahead of general elections next year.

Continued foreign investor buying has also supported shares. Overseas investors were buyers of Rs 1,151 crore rupees worth of shares on Thursday, taking total inflows for the year to over 1 trillion rupees, regulatory and exchange data show.

The median forecast is for an increase of 180,000 in US payrolls with the jobless rate steady at 7.2 per cent.

The benchmark Sensex rose 0.18 per cent, or 38.72 points, to end at 20,996.53, its highest close since November 1. This also marked its second consecutive weekly gain. The index is not far from a record high of 21,321.53 hit on November 3.

The broader Nifty rose 0.3 per cent, or 18.80 points, to end at 6,259.90, also gaining 1.4 per cent for the week, not far from a record 6,357.10 hit on January 8, 2010.

The share rally is, however, masking an underlying weakness. The market has been lifted by just a handful of stocks of exporters reaping the benefits of a slump in the rupee.

Blue chips rose again on Friday. Axis Bank rose 3.1 per cent, while ICICI Bank ended 0.7 per cent higher, Shares of two-wheeler companies gained on optimism about their earnings outlook. Hero MotoCorp rose 2.2 per cent, Bajaj Auto gained 0.5 per cent, while Eicher Motors rose 1.5 per cent.

Power Grid Corp of India shares rose 2.8 per cent after stronger-than-expected demand for its $1.1 billion share sale.

Sugar companies surged after farm minister Sharad Pawar said India was looking at providing incentives for production of raw sugar and also at doubling the mandatory blending of ethanol in gasoline to 10 per cent.

Balrampur Chini Mills gained 2.6 per cent, Bajaj Hindusthan surged 5.8 per cent, while Shree Renuka Sugars ended five per cent higher.

Among stocks that fell, Jubilant Life Sciences shares fell 7.5 per cent adding to Thursday's 10 per cent fall after the company said it had received a warning from the US Food and Drug Administration over manufacturing practices at one of its US facilities.