The markets were stuck in a range for better part of the day as the benchmark Sensex ended on Friday with a measly gain of nearly 40 points at 24,646.48, a one-month high, as Asian markets turned higher and prospects of a policy rate cut improved.
For the whole week, the Sensex rallied 1,492.18 points, or 6.44%, and Nifty zoomed 455.60 points, or 6.48% -- their biggest weekly gain in more than four years.
The 30-share barometer started on a strong footing before settling higher by 39.49 points, or 0.16%, at 24,646.48, a level last seen on February 1. Intra-day, it slipped into the negative zone and hit a low of 24,531.80.
This is its best weekly performance since December 2011.
Higher levels could not be sustained as participants locked in gains in blue-chips. The gauge had gained 1,604.99 points in the previous three consecutive sessions.
The NSE Nifty after recapturing the crucial 7,500-mark closed at 7,485.35, up 9.75 points, or 0.13%.
Traders said there is considerable improvement in risk appetite after the government kept its deficit target for the next fiscal at 3.5 per cent of GDP in the Budget 2016, raising hopes of a reduction in the policy rate.
“Market has gained more than 7 per cent during this week as the fiscal consolidation is attracting FIIs. The consensus is pointing to a significant upside on US non-farm payroll data, which could provide clues on Fed rate hike direction,” said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
The gains were led by BHEL, SBI, Coal India, Tata Motors, Cipla, ONGC and Bajaj Auto.
The rupee firmed up to a fresh two and a half month high of 67.08 on increased foreign fund inflows, boosting sentiment further.
IT stocks retreated as a stronger rupee adversely affects their earnings amid profit-booking at prevailing attractive higher levels.
Out of the 30-share Sensex pack, 16 ended higher, while 14 led by Sun Pharma, Asian Paints, Wipro, Maruti Suzuki, L&T, Bharti Airtel, TCS, GAIL, RIL and NTPC succumbed to profit-booking.
The BSE metal index jumped the most surging 2.15%, followed by PSU 1.94%, banking 1.28%, power 1.19%, realty 1% and oil and gas 0.40%.
In line with the trend, the mid-cap index rose 1.13% and small-cap 0.75%.
Foreign investors net bought shares worth Rs 911.98 crore on Thursday, showed provisional data.
Stock exchanges will remain closed on Monday on account of Maha Shivratri.
Key indices in China, Hong Kong, Japan and Singapore ended higher by up to 1.18% following positive US economic data and a bounce in crude oil and commodity prices.
Major stocks in Europe remained little changed as investors awaited a key US jobs report.