Indian shares posted their best session since early June on Friday, snapping a two-week losing streak, as easing worries about credit risks from exposure to Adani Group stocks lifted heavyweight financials.
The NSE Nifty 50 rose 2.39% to 23,907.25, while the BSE Sensex gained 2.54% to 79,117.11. Friday's climb pushed the Nifty and Sensex to weekly gains of 1.6% and 2% after two weeks of losses.
Eleven of the 13 major sectors advanced this week, with realty jumping 6.26%. Indian shares had slipped into correction territory in recent sessions on lacklustre corporate earnings and sustained foreign selling.
The blue-chips hit their lowest since early June on Thursday, after Chairman Gautam Adani and seven others were indicted by U.S. on alleged bribery charges.
The Adani Group has denied the allegations, calling them "baseless".
After losing about $27 billion in market value on Thursday, Adani group companies shed about $1.2 billion on Friday, with only four of the 10 group stocks ending in the red.
However, on a weekly basis, Adani Enterprises and Adani Ports fell 21.2% and 10.1%, respectively, leading the list of Nifty 50 laggards.
"Post the corrections in benchmarks and broader small- and mid-caps, quality stocks are available at reasonable valuations, attracting investors," said Anil Rego, founder and fund manager at Right Horizons.
On the day, information technology rose 3.3%, after data showed strength in the labour market in the U.S., a key source of revenue for the sector.
J.P. Morgan said it saw no major credit risk to India's banking system from exposure to Adani Group stocks.
State-owned lenders advanced 3%. Financials and banks gained about 1.5% each, rebounding from a drop in the previous session.
State Bank of India climbed 4.5% after Jefferies reiterated the lender among its top picks in the banking sector, citing strong earnings outlook.
