Sensex heads for biggest single-day gain since October

MUMBAI (Reuters) - Indian stock markets rose 2 percent on Friday, looking set to post their biggest single-day percentage gain since October as hints of more stimulus measures from the European Central Bank lifted global markets, but were still headed for a third weekly fall.

Global markets were also supported after oil prices rose 5 percent on Friday. Although higher crude prices are not good for India's current account balance, they are helping shore up risk sentiment in global assets.

Friday's gains were first in three sessions, but the broader Nifty was still down 0.35 percent for the week, while the benchmark Sensex was headed for a 0.2 percent decline, their third consecutive weekly loss.

Analysts said whether shares can gain further would depend on corporate earnings results and developments in China, where markets have remained volatile over concerns about economic growth.

"Sustainability (of market gains) would depend on quarterly earnings performance and no negative news flow from China," said Gaurang Shah, vice president at Geojit BNP Paribas.

The broader NSE index gained as much as 2.08 percent in its biggest single-day percentage gain since Oct. 5, 2015.

The Sensex gained as much as 2 percent.

Blue-chip stocks battered this week led gains, with Housing Development Finance Corp up 2.3 percent, Reliance Industries rising 2.4 percent and Larsen & Toubro 3.2 percent higher.

Cigarette maker ITC gained 0.5 percent ahead of its quarterly results.

Idea Cellular fell as much as 7.4 percent after third-quarter earnings fell short of street estimates.

Meanwhile, higher crude prices led to a sharp correction in aviation stocks. InterGlobe Aviation fell over 18 percent, while Jet Airways was down 10.3 percent.

(Reporting by Karen Rebelo in Mumbai; Editing by Subhranshu Sahu)