Mumbai: Markets surged for the third consecutive week, as both the key indices scaled their highest levels since 2010, on persistent buying from investors, on sustained capital inflows from foreign funds, coupled with encouraging economic growth in China.
The sentiment was also boosted on speculation that Federal Reserve could maintain monetary stimulus next year on concerns that the 16-day partial US government shutdown, which ended this week, may curb growth in the world's largest economy.
The BSE benchmark Sensex and Nifty climbed to their highest peaks in almost three years on value buying across the board triggered by global cues as concerns about US tapering eased and China's economic growth picked up.
The Sensex resumed slightly higher at 20,534.61 on initial buying, but dropped to 20,375.42 on fresh selling in view of rising inflation figure amidst lowering of forecast for India's economic growth by the World Bank.
However, it recovered to 20,932.23 before ending at 20,882.89, showing a gain of 354.30 points, or 1.73 percent, over the previous close. The 30-share BSE index notched up to its highest close since 20,932.48 on November 9, 2010.
Meanwhile, inflation, as measured by Wholesale Price Index, rose to a seven-month high of 6.46 percent in September from 6.1 percent in August and 5.85 percent in July.
The World Bank lowered its forecast for India's GDP growth to 4.7 percent in FY14 from 6.1 percent estimated earlier.
It has gained 1,155.62 points, or 5.86 percent, during the three weeks.
The NSE 50-share Nifty also rose by 93.15 points, or 1.53 percent, to 6,189.35. The IT index has also risen by 356.15 points, or 6.11 percent, during the three weeks.
China's economy expanded 7.8 percent in the three months ended September, up from a two-decade low of 7.5 percent in the previous quarter.
Persistent foreign capital inflows also boosted the market as overseas investors continued their buying spree as they bought a net Rs 4,475.88 crore during the week including the provision data from the stock exchanges.
Metal, refinery and FMCG sector stocks firmed up on good buying enquiries.
In the domestic market, 24 scrips out of the 30-share Sensex pack ended higher while remaining six finished lower.
Major gainers from the Sensex pack were Bharti Airtel (7.09 percent), Tata Steel (6.72 percent), SSLT (6.60 percent), Reliance Ind (4.90 percent), Wipro (3.81 percent), ITC (3.50 percent), HDFC Bank (2.79 percent), ONGC (2.75 percent) and Dr Reddy's Lab (2.52 percent).
Among the major indices, S&P BSE-100 rose by 7.64 percent, followed by S&P BSE-IPO 4.53 percent, S&P BSE-Metal rose by 3.43 percent followed by S&P BSE-Oil&Gas 3.41 percent and S&P BSE-FMCG 2.61 percent.
Total turnover at BSE and NSE dropped to Rs 7,605.86 crore and Rs 45,274.33 crore, respectively as against the last weekend's level of Rs 9,512.08 crore and Rs 54,168.16 crore.