Extending the gaining streak for the seventh week in a row, the BSE benchmark Sensex gained nearly 541 points to end the week at over six-month high of 18,289.35 on hopes of cut in key policy rates by RBI after fall in overall inflation coupled with furious capital inflows.
On the global front, the European Central Bank (ECB) and European officials were moving closer to an agreement to end Greece's funding gap, which could clear way for approval of a second bailout as soon as Monday and also strong US economic data that spurred investors into riskier assets like equities.
Back home, headline inflation, measured by the Wholesale Price Index (WPI) dropped to 6.55% in January, the lowest since December 2009 when it was 7.15%, which may prompt the apex Bank to cut policy rates in the coming months.
As a result, interest rate sensitive realty, banking and auto stocks were in keen demand. Power, capital goods and consumer durable counters too attracted heavy buying.
Overall 12 out of 13 sectoral indices closed in the green between 0.44% and 10.18% while only BSE-Oil&Gas declined by 1.44% following fall in the top heavyweight RIL on reports of a likely decline in gas output from the company's KG-D6 oil block in next fiscal.
The BSE benchmark Sensex crossed its 18K mark after a a gap of 6-1/2 month before ending the week at 18,289.35, showing a gain of 540.66 points or 3.05% from its last weekend's level.
Previously, it had ended at 18,314.33 on August 1, 2011. It has risen by 2,834.43 points or 18.34% in the straight seven weeks.
The NSE 50-share Nifty also shot up by 182.70 points, or 3.39%, to finish above 5,500-mark, for the first time after August 1, 2011, at 5,564.30. In seven-week of gaining string, it has flared up by 940.00 points, or 20.33%.
Strong buying by foreign funds was the main reason behind the current unprecedented rally. Foreign Institutional Investors (FIIs) bought shares worth Rs 4,518.09 crore, including provisional data of February 17, as against Rs 4,040.80 crore last week. There total investment was gone nearly a hefty 21K crore in the current calender so far.
After realty segment, power sector was the second top gainer after Prime Minister Manmohan Singh initiated clearance of coal supplies to power generation firms, as a result, Tata Power jumped by 7.04% and NTPC by 4.34%.
From the 30-share sensex pack, 21 stocks ended in green while nine finished with losses.
Major gainers from the sensex were BHEL (16.67%), SBI (11.24%), DLF (10.03%), M&M (8.43%), Larsen (7.28%), Hero Motoco (7.11%), Tata Motors (6.53%), Infosys (6.03%), Maruti (6.00%), Jindal Steel (5.96%) and ICICI Bank (5.75%).
However, Cipla declined by 7.87% followed by Reliance Ind 2.88%, Coal india 2.04%, GAIL 1.30% and Hindalco 1.24%.
Among the sectoral indices, the BSE-Realty was the top gainer with a rise of 10.18% followed by BSE-Power (8.54%), BSE-CG (7.90%), BSE-CD (7.76%), Bankex (6.25%), BSE-Auto (6.24%) and the BSE-IT (3.58%).
The BSE-Mid cap and the BSE-Small cap indices also shot up by 4.77% and 3.27% respectively in view of persistent buying from retail investors.
The total turnover at BSE and NSE rose to Rs 18,859.93 cr and 82,432.92 cr respectively from the last weekend's level of Rs 17,236.16 cr and Rs 76,968.91 cr.
Taking a nap for a week, the Indian rupee continued its north-bound journey and closed the week up by 15 paise at 49.27/28 against the Greenback on hefty capital inflows in distinctly firm local stocks amid sustained dollar selling by exporters and some banks.
Weakness in dollar overseas too aided boosted the rupee sentiment.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed the week slightly lower at 49.45/46 a dollar from last weekend's close of 49.42/43.
Later, immediately it touched a low of 49.54 on Monday on dollar demand from importers, mainly oil refiners, and expectations of euro to go firm which was aided by the Greek Parliament passing a package of austerity measures.
However, it rebounded on the same day on heavy dollar selling by exporters and some banks.
The main reason behind the recovery in the rupee was heavy and sustained capital inflows as also weak dollar overseas and the rupee rebounded on the same day, Monday, to a high of 49.1250. It remained to hover in a same range throughout the week between high and low.
FIIs remained net buyers in equities and they picked up shares worth $807.8 million in first four day of the week and a total over $4.8 billion in 2012 till February 16.
It later ended the week at 49.27/28, showing a rise of 0.30%.
The Indian benchmark Sensex continued its 7th week of rally and gained by nearly 541 points during the week.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Rupee traded strong, taking cues from dollar inflows into local Equity markets which continue to trade bullishly and are up by over 18% this year on FIIs buying of nearly $4.8 billion."
The RBI fixed the reference rate for US dollar and Euro at Rs 49.2128 and Rs 64.5849 from Rs 49.6445 and Rs 65.7995 last weekend, respectively.
The rupee premium for the forward dollar ended mixed on alternate bouts of buying and selling.
The benchmark six-month forward dollar payable in July finished down at 159-161 paise from last weekend's close of 164-166 paise while far-forward contracts maturing in January settled slightly better at 289-1/2-291-1/2 paise from 289-291 paise previously.
The rupee recovered against the Pound Sterling to end the week at Rs 77.97/99 from preceding weekend's level of Rs 78.21/23 and also hardened to close the week at Rs 64.67/69 per euro from last weekend's level of Rs 65.46/48.
It shot up further against the Japanese yen to settle the week at Rs 62.31/33 per 100 yen from Rs 63.60/62.
Oils and oilseeds
Edible oil prices shot up further in a mixed oils and oilseeds market during the week under review.
Groundnut oil hardened further due to persistent demand from retailers and stockists in view of on going marriage season amid poor arrivals from key producing belts as well as firming trend in overseas markets.
Refined palmolein also firmed up further on sustained buying support from retailers coupled with higher Malaysian advices.
Trading sentiment also buoyed after palm oil climbed to the highest level in almost three months in global markets as signs of the US economic recovery boosted optimism that demand will increase for commodities.
Meanwhile, castorseeds bold and castoroil commercial reacted downwards owing to lack of inquiries from shippers and soap manufacturers.
Castorseeds futures also fell back on poor export orders amidst weak spot demand
On the other hand, linseed oil closed unchanged in the absence of worthwhile buying activity.
The market was closed on Thursday for the municipal corporation elections.
In the edible oils segment, groundnut oil resumed steady at Rs 1,060, but later shot up to close at a new high of Rs 1,080 from preceding weekend's level of Rs 1,060, showing a smart gain of Rs 20 per 10 kg.
Refined palmolein opened steady at Rs 562, but later moved up to finish at Rs 567 from last weekend's level of Rs 562, disclosing a gain of Rs 5 per 10 kg.
Turning to the non-edible section, castorseeds bold opened lower at Rs 3,890 and declined further to close at Rs 3,800 from previous weekend's level of Rs 3,900, showing a fall of Rs 100 per 100 kg.
Castoroil commercial resumed lower at Rs 808 and dropped further to end at Rs 790 from preceding weekend's level of Rs 810, showing a loss of Rs 20 per 10 kg.
Linseed oil closed unaltered at Rs 845 per 10 kg.
Moving to the futures section, castorseeds for March delivery resumed steady at Rs 3,775, but later moved in a range of Rs 3,790 and Rs 3,652 before settling at Rs 3,694 from last Saturday's closing level of Rs 3,775, disclosing a fall of Rs 81 per tonne.
A divergent trend was seen in precious metals as gold declined modestly, while silver improved at the domestic bullion market during the week under review.
The yellow metal failed to sustained last weeks gain and traded mostly range-bound in the absence of any large scale buying from stockists and investors, though some retail momentum was witnessed at lower levels. Global uncertainity too weighed on the sentiment.
On contrast, silver added some lustre to the trade towards the fag-end on stray industrial demand.
The bullion market was closed on Thursday in view of civic election.
On the international front, gold encountered volatility and traded choppy mainly on concerns over much delayed second tranche of Greek bailout deal alongwith encouraging US economic data amidst geopolitical tensions over Iran, leaving the metal little changed.
Silver also traded lacklustre in the absence of industrial support.
In New York, gold for April delivery ended almost flat at $1,725.90 an ounce from previous weekend level of $1,725.30.
Silver for March delivery also finished modestly lower at $33.22 an ounce as compared to last weekend's level of $33.60.
Standard gold (99.5 purity) resumed lower at Rs 27,900 and traded between Rs 27,930 and Rs 27,740 before closing at Rs 27,865 from preceding weekend's level of Rs 28,005, showing a loss of Rs 140 per ten grams.
Pure gold (99.9 purity) also opened weak at Rs 28,020 and moved between Rs 28,060 and Rs 27,870 before ending at Rs 27,995 from previous weekend level of Rs 28,130, disclosing a fall of Rs 135 per 10 grams.
Silver ready (.999 fineness) started marginally higher at Rs 56,145 and hovered between Rs 56,190 and Rs 55,910 before settling at Rs 56,150 from last Saturday's closing level of Rs 56,100, showing a mere gain of Rs 50 per kg.