The benchmark Nifty 50 index logged its largest weekly rise in more than four years on Friday, on signs that foreign investors are coming back to the market and as investors bet the blue-chip indexes have bottomed out after a record slump.
The NSE Nifty 50 gained 0.69% on the day to close at 23,350.4, while the BSE Sensex rose 0.73% to 76,905.51, both six-week closing highs. They rose about 4.2% during the week.
The broader midcaps and smallcaps soared 7.7% and 8.6%, respectively, to register their biggest weekly gains in about five years.
The rupee logged its best week in more than two years.
"This is just bargain buying," Dharmesh Kant, head of equity research at Cholamandalam Securities, said. "We may see Nifty moving towards 23,500-24,000 points as investors position themselves for the earnings season and RBI policy."
Foreign portfolio investors bought Indian stocks in two of the last three sessions. They have been buyers in five out of the 57 trading sessions this year and have sold shares worth nearly $29 billion since the indexes hit peaks in late-September.
The Nifty 50 is still down about 11% from its record high.
For the week, all 13 major sectors rose, with realty and state-owned firms rising 8% and 7%, respectively, and leading the gainers.
Heavyweight financials rose 5.5%, providing the biggest boost to the benchmarks.
On the session, Manappuram Finance jumped 7.7% after the gold loan provider said Bain Capital will acquire an 18% stake.
Investors await the Reserve Bank of India's policy decision on April 5, when the central bank is widely expected to slash rates again amid slowing growth and below-target inflation.
This week, the Federal Reserve maintained its projection for two rate cuts in 2025. Lower US interest rates make emerging markets, such as India, more attractive to foreign investors.
