After losing 255 points in the previous session, the BSE Sensex rebounded from four-month lows and ended 173.47 points, or 0.86 per cent, higher at 20,366.82. The surge was led by stocks of IT, telecom, banking and refinery sectors. Today's gain is the best since the 256.61-point jump on January 15.
In the 30-share index, 21 stocks gained led by the three most influential - Reliance Industries, ITC Ltd and Infosys Ltd. RIL shot up by 1.74 per cent, ITC by 0.96 per cent and Infosys by 1.65 per cent. Tata Motors (3.25 per cent) and GAIL (2.56 per cent) were the biggest gainers.
On similar lines, the 50-share NSE index Nifty jumped 47.25 points, or 0.79 per cent, to close at 6,048.35.
"WPI for January eased to seven-month low level at 5.05 per cent. IIP showed contraction in December. This has triggered hopes of some easing in interest rates in next monetary policy. Rate sensitives, after initial weakness, recovered strongly from day's low," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Data yesterday had revealed that retail inflation fell to 24-month low at 8.79 per cent in January.
Brokers said the Indian market received another push on reports of firming Asian and European markets as data showed the euro-area economy grew more than forecast in fourth quarter.
Telecom stocks were in demand after the government raised about USD 10 billion from auction of wireless spectrum.
Bharti Airtel rose 0.86 per cent and Idea Cellular by 0.80 per cent. Reliance Communications scrip gained for the first time in six days, surging 1.98 per cent.
Sectorally, the BSE IT sector index gained the most by rising 1.39 per cent, followed by Teck index 1.22 per cent, Oil and Gas index 1.21 per cent and Consumer Durables index 0.94 per cent.
The Sensex lost 9.74 points since last Friday's closing -- the third straight weekly drop.
* BSE index gains 0.86 pct, NSE index up 0.79 pct
* State Bank of India slumps on weak earnings
* Investors to take cues from Union Budget on Monday
Indian shares end higher; telecom, IT stocks lead
(Reuters) - Indian shares ended higher on Friday, led by telecom services providers and software companies ahead of the interim budget where Finance Minister Palaniappan Chidambaram has a tough task of wooing voters while keeping fiscal discipline.
State Bank of India, however, slumped after the country's biggest lender reported a fourth straight consecutive drop in quarterly net income, dragging other lenders down.
Chidambaram will be walking a tightrope when he presents an interim budget for the coming fiscal year on Monday, doling out more funds to woo voters and tax cuts to support industry while projecting a lower fiscal deficit before elections.
Analysts are not betting on any major policy announcement, but will await the fine print on how Chidambaram meets his fiscal deficit target of 4.8 percent for the current fiscal year.
"The budget is the last statement for the government to do whatever it can on reforms. However, I think the finance minister will do some tinkering at best," said UR Bhat, MD, Dalton Capital Advisors, which advises foreign institutional investors in India.
Data showing wholesale prices-based inflation eased to an eight-month low in January also lifted investors' sentiment, traders said.
The benchmark BSE index closed up 0.86 percent at 20,366.82, while the broader NSE index ended higher 0.79 percent at 6,048.35.
The BSE index fell 0.05 percent on a weekly basis, while the NSE lost 0.2 percent.
Overseas investors bought Indian shares worth 3.99 billion rupees ($64 million) on Thursday, exchange data showed. Foreign investors were net buyers for a second straight session after a nine-day selling streak in the secondary share market, data showed.
Shares in software services companies gained on defensive-buying by institutional investors, traders said. Infosys gained 1.63 percent, while Tata Consultancy Services ended up 1.6 percent.
Shares in telecom companies rose after they won airwaves in the premium 900 megahertz band spectrum.
Bharti Airtel ended up 0.86 percent and Idea Cellular closed higher 0.68 percent.
State Bank of India fell 1.7 percent after its earnings disappointed investors.
Shares of Bajaj Auto ended 3.32 percent lower on news that Egypt's government is proposing a ban on import of motorbikes and three-wheelers, which is an important export market for the Indian company.
Shares in Future Retail ended up 1.29 percent after gaining as much as 20 percent earlier in the day, after the company's October-December quarterly earnings beat estimates.
FACTORS TO WATCH
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