Sensex rises, heads for biggest weekly gain in five

(Reuters) - Indian shares rose on Friday and were on track to post their biggest weekly gain in five, as domestic factors such as expectations of a good monsoon and economic reforms continued to support auto and consumer goods stocks.

The broader NSE Nifty <.NSEI> and the benchmark BSE Sensex <.BSESN> were up more than 3 percent each on the week, heading for their biggest weekly gains since May 27.

The indexes are set to post their fifth consecutive session of gains on Friday, with the NSE hitting its highest in more than 10 months and the BSE touching its highest since October.

Markets around the world also seemed to have rebounded, with European markets rallying for the third straight session.

A business survey on Friday showed India's manufacturing growth rose to its highest in three months, driven by stronger demand, although firms barely raised prices, leaving the door open for another rate cut by the central bank this year.

Foreign investors had bought a modest $63.4 million in Indian shares this week as of Wednesday, after selling $84.90 million last Friday, the day after the Brexit vote.

"The markets have taken cognizance of the fact that major central bankers are quite ready to take action in case of financial concerns in the market," said Saurabh Jain, assistant vice president of research at SMC Global Securities.

The government's move to open up FDI, federal staff wage hike, an extended monsoon forecast and hopes of tax reforms are helping the recovery, Jain added.

The benchmark BSE index <.BSESN> rose 0.64 percent to 26,173, while the broader NSE index <.NSEI> was up 0.61 percent at 8,337.95 as of 0923 GMT.

The rally was led by consumer goods companies and automakers, with the Nifty FMCG index <.NIFTYFMCG> and the Nifty Auto index <.NIFTYAUTO> gaining 3.04 percent and 5.93 percent this week, respectively.

ITC Ltd rose 3.64 percent and was up about 7 percent on the week.

Auto stocks such as Hero MotoCorp and TVS Motor Co gained between 4 percent and 5 percent this week.

Mumbai-based cooking gas supplier Mahanagar Gas Ltd surged as much as 30.4 pct on its market debut.

Larsen & Toubro was up 2.8 percent after the Economic Times reported the defence ministry finalised an artillery gun contract with the company.

Software firm KPIT Technologies , which was among the top losers on the NSE, slumped as much as 14.60 percent to its lowest since May 9, after it forecast lower Q1 revenue.

(Reporting by Darshana Sankararaman in Bengaluru)