The benchmark BSE Sensex gained 3.6% this week, its third straight weekly gain.
Foreign institutional investors (FIIs) bought shares worth R819 crore while domestic institutions sold shares worth R614 crore, provisional BSE data shows.
In a recent note to clients, Michael Hasenstab, a portfolio manager with the Franklin Templeton Fixed Income Group, said, Many emerging Asian economies have built ample liquidity cushions through significant accumulation of international reserves. Unlike Europe or the US, Asia has built up plenty of room to provide fiscal stimulus and to lower interest rates in response to a worsening external environment.
The BSE Sensex rose 95.27 points or 0.57% to close at 16,739 on Friday, while the broader 50 share NSE Nifty was up 30 points or 0.6% at 5,048.
The Street is expecting RBI to take steps to ease liquidity and prop up growth, when it meets next week.