The US Federal Reserve's decision to cut interest rates provided impetus to the stock markets which saw them kissing historic peaks during the week. <b1>
Key index, Sensex, hit the 16,000 mark while Nifty soared to cross the 4,000-level respectively.
Both the indices registered their biggest ever weekly gains in absolute terms and the Sensex completed its five-week winning streak with a sharp gain of 2,422.21 points or 17.13 per cent.
The 30-share barometer, BSE, showed a weak trend at opening but recovered from Tuesday on the back of expectations of US interest cut.
The US Federal Reserve on Tuesday night slashed key lending rates by a surprise 0.50 per cent and discount rate by 0.50 to ease concerns of the world's biggest economy slipping into recession on account of sub prime woes, giving a major boost to the emerging markets like India and China.
As a result, the Sensex spurted to a new life-time intra-trade peak of 16,616.84, before concluding the week at 16,564.23, a record rise of 960.43 points or 6.16 per cent over the last weekend's close of 15,603.81.
Similarly, the broad-based S&P CNX Nifty of the National Stock Exchange also flared up to a new all-time intra-day peak of 4,855.70 before ending the week at 4,837.55 from preceding weekend's close of 4,518.00, a steep rise of 319.55 points or 7.07 per cent.
The Sensex garnered a record 2,422.21 points or 17.13 per cent in the last five-week successive winning streak. Sectors directly linked to interest rates like realty and banking registered smart gains on renewed buying interest.
The petrochem giant and heavyweight Reliance Industries (RIL) remained the most sought after stocks throughout the week and touched a new all-time peak on Friday on the back of reports that the company had found oil in D-4 block in the Krishna-Godavari (KG) basin.
The market crossed the previous peaks on Wednesday and never looked back.
Foreign Institutional Investors (FIIs), who were net sellers in the month of August, turned out to be the main driving force behind the current rally and they pumped in over USD one billion in last two days while injecting nearly USD 2 billion in the ongoing month, taking a total over USD 10 billion in the year 2007.
According to market participants, the US rate cut was good for the emerging markets as there would be more funds available for these countries in near term.
The market also got support on the last day from sustained fall in the inflation rate. The inflation rate fell to 3.32 per cent for the week ended September 8 from 3.52 per cent in the preceding weekend.
A smart rally in most of the global markets during the week also had a sentimental impact on the local bourses.
Besides IT counters, which suffered a setback on heavy selling following sharp rise in the rupee value to a fresh 9-year high, all other sectoral indices including dollex, closed with sharp to moderate gains.