Ignoring RBI's hard monetary stance, the BSE benchmark Sensex snapped its last 3-week losing streak by surging 359 points in the week due to all-round buying in view of resumption of capital inflows from foreign funds coupled with strong global cues.
Strong global cues due to statements by the German and Italian leaders, promising to do everything to protect the eurozone, kept the market mood upbeat.
The RBI, in its first quarter monetary policy review, kept the key lending (repo) rate as well as cash reserve ratio (CRR) unchanged, while brought down the Statutory Liquidity Ratio (SLR) -the amount of deposits banks park in government bonds- by one% to 23 pc, effective from August 11.
The BSE sensitive index opened higher at 16,919.14 and shot up further to 17,291.99 before ending the week at 17,197.93, a gain of 358.74 points, or 2.13%.
It had lost by 681.93 points or 3.89% in the last three weeks.
The NSE 50-share Nifty also shot up by 115.85 points or 2.27% to 5,215.70. It had also fell by 217.10 points or 4.08% during the last three weeks.
Buying was so strong that all indices closed with sharp gains between 0.08% and 4.97% with power, capital goods, realty, refinery, IT, FMCG and PSU counters taking the lead.
Buying was also seen in second-line stocks, an indication of return of retail investors, with the BSE-Midcap and BSE-Smallcap indices outperforming the Sensex with a rise of 3.14% and 2.96%, respectively.
IT stocks were mostly higher on weak rupee. The rupee again breached the 56-mark against the US dollar to hit a fresh one-week low. A weak rupee boosts revenues of IT firms in rupee terms.
Foreign Institutional Investors (FIIs) made substantial purchases of shares during the week as per the SEBI's data.
From the 30-share Sensex pack, 24 stocks finished with gains while remaining six declined.