Markets made a positive start to 2012, with Sensex moving up 394 points in the first week of trade, helped by dropping food inflation and expectations of better economic numbers in the coming weeks.
Globally, markets gained as latest data showed an improvement in Chinese manufacturing growth and lowest joblessness rate in three years in the US.
The 30-scrip sensitive index of the Bombay Stock Exchange (BSE) rose 2.55% or 393.88 points points in the weekly trade.
At the National Stock Exchange, the 50-scrip S&P CNX Nifty moved up 2.8% or 129.8 points to close the week at 4,754.1 points.
Both benchmarks had slipped by a staggering 24% in 2011.
During the week under review, broader market indices too gained with the BSE 500 index rising 2.83%. The BSE midcap index went up by 3.17%, while the BSE smallcap index rose 3.81%.
"Positive global markets, a dip in food inflation and expectations of relatively better economic numbers in the first fortnight boosted sentiments. Hopes of constructive talks between Germany and France on the European issue also helped markets move up," said Dipen Shah, head, fundamental research, Kotak Securities.
Major Sensex gainers during the week were: Tata Motors, up 12.5% at Rs 203.55; ICICI Bank, up 8% at Rs 745.45; L&T, up 7.6% at Rs 1,081.45 and Coal India, up 6.6% at Rs 319.80.
Losers included Bajaj Auto, down 9.6% at Rs 1,448.05; Hero MotoCorp, down 9% at Rs 1,729.80; DLF, down 5.8% at Rs 176.60 and M&M, down 5.2% at Rs 654.25.
Most other Asian markets closed a mixed bag although investors took some hopes from the rising factory output in China.
For the week, the Japanese Nikkei closed 0.77% lower at 8,390.35 points, while the Chinese Shanghai composite index saw a bit of profit booking and shed 1.64% down at 2,163.39 points.
However, Hong Kong's Hang Seng moved up 0.86% and ended at 18,593.06 points.
Some European markets managed to rise even as traders cautiously eyed upcoming German Chancellor Angela Merkel and French President Nicolas Sarkozy's talks to tame the Euro zone debt crisis.
Britain's FTSE 100 closed 1.39% up at 5,649.68 points on Friday, while the German DAX gained 2.71% to end at 6,057.92 points. The French CAC 40, however, slipped 0.71% to close at 3,137.36 points.
In the US markets were enthused by data which showed the unemployment rate falling to 8.5%, from 8.7% in November -- evidence of acceleration in the U.S. economy.
For the week, the US Dow Jones Industrial Average closed 1.17% up at 12,359.92 points, while the S&P 500 index closed 1.61% higher at 1,277.81 points.
The Nasdaq moved up 2.65% to end at 2,674.22 points.