Stretching gains for the fourthstraight week on the back of rise in IT, FMCG, metal and healthcare shares, the BSE benchmark Sensex rallied by another 92 points to end the shortened week at 17,783.21.
The BSE and National Stock Exchange (NSE) were closed on August 20 on the occasion of "Ramzan Id".
Persistent capital inflows into equity markets kept the market sentiment upbeat as they pumped in Rs 959 crore during the week, including the provisional data of August 24.
The 30-share Sensex surged to a five-month high of 17,972.54 on Thursday on a slew of positive developments like Infosys winning a case in the US, heavy rain in some parts of the country and a fall in inflation.
It opened higher at 17,705.14 and hovered in a range of 17,972.54 and 17,705.74 before closing the week at 17,783.21, showing a gain of 92.13 points, or 0.52 %.
The key index has gained a healthy 944.02 points, or 5.61 %, in the last four weeks.
The NSE 50-share Nifty also ended higher by 20.40 points, or 0.38 %, to 5,386.70. It has hardened by 286.85 points, or 5.62 %, over the same period.
"IT stocks were at the forefront after the country's leading software exporter, Infosys, notched handsome gains as a US Court ruled in favour of the company in an employee harassment case. Also, the stability in the US supported the IT stocks," said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities.
A marginal fall in retail inflation to 9.86 % in July from 10.02 % in June also some what boosted the sentiment.
World stocks rose on hopes that policymakers in the US and China will ease monetary policy to boost growth in world's two biggest economies.
However, gains were capped as rally in the global markets fizzled out on August 24 after a US Federal Reserve official poured cold water on expectations that another round of stimulus was on its way.
Brokers said investors and funds booked profits in the second half of the session amid worries that pace of economic reforms could be stalled with the Opposition BJP-led NDA sticking to its demand for Prime Minister Manmohan Singh's resignation on the coal block allocation issue.
The domestic sentiment remained bearish as the Reserve Bank, in its FY12 Annual Report released this week, stated inflation remains the cornerstone of monetary policy action.
Realty, refinery, capital goods, consumer durable and banking stocks suffered the most on profit booking.
Over a million employees of public sector banks went on a two-day nationwide strike (Aug 22-23) opposing banking sector reforms and outsourcing of non-core activities, affecting stock market fund flows, said analysts.
Bharti Airtel dropped by 5.38 % on reports that foreign brokerage Credit Suisse has downgraded it.
The market may remain volatile in the next week in view of expiry of futures and options segment August contract on Thursday, the analysts added.
From the 30-share Sensex pack, 21 stocks finished with gains while others ended with losses.
Major gainers from the Sensex pack were Coal India (4.69 %), Infosys (4 %), TCS (3.57 %), Cipla (3.40 %), HUL (3.34 %), Wipro (3.21 %), Sterlite Ind (3.12 %), Tata Motors (2.31 %), ONGC (1.84 %), Gail (1.76 %), HDFC (1.53 %), Maruti Suzuki (1.12 %), ITC (1.26 %) and Tata Power (1.03 %).
However, RIL fell by 4.06 % followed by Hindalco (2.63 %), L&T (2.17 %), Tata Steel (1.80 %) and Jindal Steel (1.11 %).
Among the sectoral indices, the BSE-IT rose by 3.31 % followed by BSE-Teck (1.85 %), BSE-FMCG (1.83 %), BSE-HC (1.11 %), BSE-Metal (0.92 %) and BSE-Auto (0.64 %).
BSE-Realty dropped by 2.59 % followed by BSE- Oil&Gas (1.21 %), BSE-CG (1.19 %) and BSE-CD (1.06 %).
The total turnover at BSE and NSE fell to Rs 7,886.40 crore and Rs 37,247.09 crore, respectively, from the last weekend's level of Rs 8,355.78 crore and Rs 38,697.93 crore.
Forex: The rupee recovered half of its last week's losses and appreciated by 23 paise to end the week at 55.50 against the Greenback as the supply of dollar exceeded the demand amid sustained capital inflows.
The Forex market was closed on Monday, August 20, on account of "Ramzan Id".
The dollar selling was seen since the onset of business by exporters on weak dollar overseas at initial stages as well as lack of buying by importers due to the announcement of strike by some public sector bank employees on August 22 and 23, which supported the rupee.
Firm local equity markets also aided the rupee sentiment, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed higher at 55.55 a dollar from last weekend's close of 55.73 and immediately touched a low of 55.6150 on Tuesday.
It remained firm for the first three trading days of the week to log a 2-week high of 55.12 on Thursday on continued dollar selling by exporters and some banks amid increased foreign fund inflows in local stocks.
However, on the last day of the week, it fell back on heavy dollar demand from importers due to two-day bank strike and month-end requirements, still showing a rise of 23 paise or 0.41 pct to settle the week at 55.50.
Meanwhile, retail inflation, based on the Consumer Price Index (CPI) declined marginally to 9.86 % in July, from provisional estimate of 10.02 % in June.
The Sensex closed the shortened week higher by 92.13 points or 0.52 %, extending gains for the fourth week in a row.
Foreign Institutional Investors (FIIs) remained net buyers and pumped in over USD 1.2 billion in the current month till August 23, taking a total to almost USD 11.57 billion in the calender 2012 as per Sebi data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "The INR started the week on a firm note and continued to strengthen till the last but one day where it pared some of the gains at close."
"In the week the CPI numbers beat the industry expectations and were much in line with the WPI numbers with a reading in single digit, providing the policy makers a sigh of relief and also allowing them to consider easing of the interest rates," he said.
The monsoon also provided some relief to the central and southern India and narrowing the deficit numbers in western and northern parts of the country. The global risk on mode continued the rising inflow of foreign capital which kept the Indian equity markets on an upbeat contributing towards gains in INR, he added.
The RBI fixed the reference rate for US dollar and euro at Rs 55.3820 and Rs 69.4760 from Rs 55.7023 and 68.8510 last weekend, respectively.
The rupee premium for the forward dollar ended sharply lower on fresh receivings by exporters.
The benchmark six-month forward dollar payable in January closed weak at 162-1/2-164-1/2 paise from last weekend's level of 171-173 paise and far-forward contract maturing in July also dropped to 315-317 paise from 326-328 paise last weekend.
The rupee remained weak against Pound Sterling to close the week at 87.89 from preceding weekend's close of 87.48 and also dipped further against the euro to 69.38 from 68.88.
However, It reacted downwards against the Japanese yen to 70.74 per 100 yen from last weekend's level of 70.17.
Oil and oilseeds: Edible oils prices firmed up, while non-edibles, barring linseedoil, rest all other declined at the oils and oilseeds market during the week under review.
Groundnut oil prices strengthened following rising demand from stockists and retailers amidst festival season.
Refined palmolein also gained on good buying support by retailers.
Castorseeds bold and castoroil commercial prices dropped owing to subdued demand from shippers and soap industries.
Castorseeds futures also witnessed heavy speculative sell-off amid declining spot markets as well as lower export inquiries.
Linseedoil prices moved up on renewed offtake from paint and allied industries.
The market was closed on Monday for 'Id-ul-fitr'.
In the edible oils segment, groundnut oil opened steady at Rs 1,250 later advanced to end at Rs 1,260 from preceding weekend's level of Rs 1,250 per 10 kg. Showing a modest rise of Rs 10 per 10 kg.
Refined palmolein resumed higher at Rs. 620, later moved up further to Rs. 622 before settling at Rs. 621 from last weekend's level of Rs. 610, registering a gain of Rs. 11 per 10 kg.
In the non-edible section, castoRs.eeds bold resumed down at Rs. 4,200 and drifted further to close at Rs. 4,115 from last weekend's level of Rs. 4,325, a net loss of Rs. 210 per 100 kg.
Castoroil commercial also opened lower at Rs. 870, went down to end at Rs. 853 from its previous weekend's level of Rs. 895, a fall of Rs. 42 per 10 kg.
Linseed oil resumed steady at Rs. 830, but later moved up to finish at Rs. 835 per 10 kg from preceding weekend level of Rs. 830, a modestgain Rs. 5 per 10 kg.
Moving to the futures section, castoRs.eeds for September delivery resumed higher at Rs. 4,750 and rose further to 4,800 before plunging to end at 4,410 from last Saturday's closing level of Rs. 4,680 showing a sharp fall of Rs. 270 per tonne.