The European Central Bank's plan to buy Euro 60 billion ($69 billion) worth of private and public Euro-area bonds a month, popularly known as quantitative easing (QE), till September next year have cheered investors sentiments across the globe.
The 30-share Sensex ended up 273 points at 29,279 and the 50-share Nifty surged 74 points at 8,836.
The Sensex and the Nifty touched an intra-day high of 29,409 and 8,866 mark, respectively.
Market expectation was that the ECB would announce a euro 50 billion per month QE program which would run for a year totalling between euro 600-700 billion.
According to Reuter’s poll, India's economy will pick up steam in the fiscal year beginning in April, but not by as much as analysts thought just a few months ago due to disappointment over a delayed revival in investment.
However, the broader markets underperformed the benchmark indices- BSE Midcap and Smallcap indices ended 0.1-1% lower.
Market breadth on the BSE ended negative with 1,812 declines against 1,131 advances.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 592.79 crore yesterday, as per provisional data.
At 15:35 PM, the rupee was trading strong at 61.55 against dollar due to foreign flows in domestic markets.
The appreciation spree is also attributed to positive sentiments created in domestic markets after the European Central Bank announced a stimulus package yesterday.
Among Asian front, Japan's Nikkei share average rose to a near one-month high on Friday as investors' risk appetite was buoyed after the European Central Bank unveiled a bond-buying scheme to help revive the region's economy and stave off deflation.
The Nikkei ended 1.1% higher at 17,511.75 points, the highest closing level since Dec. 29.
For the week, the Nikkei rose 3.8%. The broader Topix gained 1.0% to 1,403.22 and the JPX-Nikkei Index 400 added 0.9% to 12,749.04.
Back home, BSE Auto, Capital Goods, Power and Realty indices were up 1-2% followed by counters like Metal, Banks and TECk, all gaining by nearly 1% each.
Apart from Consumer Durables, all the sectoral indices ended in positive zone.
Among auto stocks, Tata Motors gained over 3%, M&M rose nearly 2%, Hero Motocorp was up nearly 1% and Maruti Suzuki ended marginally positive.
On Thursday, Tata Motors launched the Bolt, a hatchback, starting at Rs 4.64 lakh (ex-showroom, Mumbai).
The company is pitting this car against segment leaders Maruti Suzuki Swift and Hyundai Grand i10.
Financials also witnessed sustained buying demand. HDFC twins gained between 0.4-2%, SBI was up over 1%, ICICI Bank inched up 0.3% while Axis Bank closed flat.
A foreign brokerage has forecasted better outlook for the Axis Bank compared to its peer, ICICI Bank.
Reserve Bank is expected to come out with more monetary easing in the coming months if inflation remains in the comfortable zone, top private sector lender ICICI Bank's chief Chanda Kochhar said.
Sesa Sterlite gained over 2%. Yesterday, the company announced that its subsidiary Bharat Aluminium Company Limited (BALCO) has received approval of Consent to Operate (CTO) from the Chattisgarh State Pollution Control Board and other clearances for starting its Korba’s based 1200 MW Power Plant.
Dr Reddys Lab ended marginally lower. US-based biotechnology company Curis, Inc has entered into an exclusive collaboration agreement with Aurigene Discovery Technologies, an independent wholly-owned subsidiary of Dr Reddy’s Laboratories focusing on development of select cancer therapies.
Bharti Airtel gained nearly 4% after Deutsche Bank upgraded the stock to "buy" from "hold.
The Cabinet also gave an approval yesterday for swapping arrangement of spectrum between telecom and defence ministries, which will vacate 15 MHz of spectrum in 2100 Mhz in the next one year.
Tata Power was the top Sensex gainer, up over 6%.
IT stocks were under pressure as firmed up following the launch of quantitative easing programme by ECB.
An appreciating rupee has casted its shadow on the IT pack. Infosys and TCS have declined marginally.
Other notables losers were GAIL, BHEL and ONGC, all falling between 1-2%.
Among other shares, Adani Group companies such as Adani Enterprises, Adani Power and Adani Port & Special Economic Zone (SEZ) were back into action and ended higher by up to 8% on the bourses.
Shares of GlaxoSmithKline Pharmaceuticals surged 11% to Rs 3,480 on back of heavy volumes.