Both key indices Sensex and Nifty registered new highs and managed to gain for the third week in a row even as trading witnessed extreme volatility and profit-bookings during the truncated week.
The BSE and NSE were closed on April 8 on account of "Ram Navmi".
The week opened with the multi-phase general elections getting underway on April 7 and the trading was marked by cautiousness and profit-booking.
However, IMF and World Bank's GDP growth projection of over 5% for India in 2014-15 brought cheers to investor, and uninterrupted FII inflows provided further fodder for the rally.
Multi-billion buyout of struggling drugmaker Ranbaxy by Sun Pharma led the healthcare shares to surge.
The weekend saw profit-booking following renewed macro-economic concerns amid dip in March exports by 3.15%, as investors look for inflation data and upcoming corporate earnings for definite direction in the next few weeks.
Foreign institutional investors (FIIs), the main market driver, infused Rs 1,848.41 crore during the week in Indian equities, including the provisional figure of April 11, according to SEBI data.
The Sensex resumed slightly down at 22,355.56 and jumped to hit an all-time intra-trade high of 22,792.49, and hit a low of 22,197.51 before ending at 22,628.96, posting a handsome gain of 269.46 points, or 1.21%, over the last weekend level.
The 30-share BSE index has surged 873.64 points, or 4.02%, in the last three weeks.
The NSE Nifty initially fell to a low of 6,650.40 before bouncing back to hit a fresh intra-trade peak of 6,819.05. The 50-share index later fell back slightly to end the week at 6,776.30, registering a gain of 81.95 points, or 1.22%.
The market also got support on hopes that the BJP-led market friendly Modi government would come into power in its Lok Sabha polls where they promised more business-friendly policies if the party comes to power after elections.
Pharma major Sun Pharma was the top gainer from the Sensex pack with a rise of 9.77% after the company's move to fully acquire rival Ranbaxy in an all-stock transaction valued at %3.2 billion. Showing signs of a recovery, the index of industrial production (IIP) once again slipped into negative territory and contracted 1.9% in February from growth of 0.8% (revised) in January due to poor performance in manufacturing, especially capital goods.
Twenty-three scrips from the Sensex pack ended higher while seven others finished lower. Major gainers were Sun Pharma (9.77%), SBI (4.73%), Axis Bank (4.72%), Tata Steel (4.53%), Tata Motor (4.48%), Coal India (3.92%), Tata Power (3.48%), NTPC (3.32%), SSLT (3.13%), Wipro (2.66%), Gail India (2.61%), HDFC (2.52%), Bharti Airtel (1.79%), HDFC Bank (1.76%) and TCS (1.13%).
However, Hero MotoCorp fell by 3.40%, followed by Dr Reddy's Lab 2.78%, Infosys 2.40%, ONGC 1.67% and Bajaj Auto 1.38%. Among the S&P BSE sectoral indices, Power rose by 3.55% followed by Metal 2.40%, CG 2.36%, Bankex 2.28%, PSU 2.21%, Realty 2.01% and HC 1.37%. Small-cap and Midcap indices also firmed up by 3.55% and 1.96% respectively on the back of persistent buying from retail investors and outperformed the Sensex. The total market turnover at BSE and NSE dropped to Rs 10,374.36 crore and 66,228.39 crore respectively from the last weekend's level of Rs 13,908.50 crore and Rs 74,606.26 crore.
Forex: On the contrary to the recording breaking local stock markets, the rupee continued to decline against the American currency for the 2nd consecutive week by dipping another 9 paise to 60.17 per dollar on persistent demand of US currency from banks and importers despite weakness of the greenback overseas.
However, sustained foreign capital inflows into equity market restricted the rupee's fall against the dollar, a forex dealer said.
The rupee resumed higher at 59.90 per dollar as against the last weekend's level of 60.08 at the Interbank Foreign Exchange market on initial selling of dollars by banks and exporters in view of strong equity market.
The rupee got a little bit support after minutes from the Federal Reserve's meet on April 9 detailed risks that could keep interest rates depressed even after the first rate hike, which weighed negatively on the dollar.
However, it dropped afterwards to 60.35 before settling the week at 60.17, disclosing a loss of nine paise or 0.15%. It moved in a range of 59.78-60.35 per dollar during the week.
The benchmark S&P BSE Sensex closed the week higher by 269.46 points, or 1.21%, extending gains for the third straight week while FIIs picked up shares worth %368.09 million in the first three sessions of the week as per Sebi data.
Pramit Brahmbhatt, Veracity Group CEO, said, "In the first half of the week, the rupee depreciated slightly as importers demand kept rupee under pressure."