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Benchmark share indices surged nearly 3 per cent to snap four-week losing streak led by rate-sensitive shares, ahead of the central bank's policy meet early next week and renewed buying interest in pharmaceutical shares.
In the truncated trading week to April 1, the 30-share Sensex ended up 801.50 points or 2.92 per cent at 28,260.14 and the 50-share Nifty ended up 244.85 points or 2.93 per cent at 8,586.25.
In the broader market, the BSE Mid-cap Index gained 3.76 per cent to settle at 10,750.42, while the Small-cap Index surged 6.76 per cent at 11,146.72, outperforming the benchmark indices.
Analysts remain bullish on the road ahead for the markets and suggest that investors should accumulate stocks on a decline.
Markets were shut on Thursday and Friday on account of Mahavir Jayanti and Good Friday, respectively.
On the macro-economic front, the growth in output of eight core industries, which has a weight of nearly 38 per cent in the Index of Industrial Production, stood at 1.4 per cent in February, a 17-month low. The Centre's fiscal deficit crossed the Budget's revised estimate (RE) by 17.5 per cent, during the April 2014-February 2015 period.
India's new five-year Foreign Trade policy was unveiled on Wednesday. Declaring that she wants to "make India a significant factor in world trade by 2020", Commerce Minister Nirmala Sitharaman announced the foreign trade policy 2015-20.
Manufacturing activities in the country rose in March compared to the previous month on the back of output growth and increase in new orders, but was lower than January, showed a widely-tracked HSBC purchasing managers' index (PMI).
SECTORS & STOCKS
The BSE Healthcare Index rallied over 4 per cent followed by counters like banks, capital goods, FMCG, auto, power and realty, all gaining by over 3 per cent each. However, BSE IT Index slipped marginally.
Sun Pharma and Ranbaxy surged over 6.5 per cent ahead of record date set for the merger.
After announcement of closure of merger deal with Ranbaxy, Sun Pharma said that Ranbaxy will be delisted from the Indian Stock Exchanges.
Other notable gainers from the pharma space were Biocon, Lupin, Cadila Healthcare and Strides Arcolab.
Banking shares have gained ahead of ahead of the Reserve Bank of India's policy review on April 7.
Axis Bank, Bank of Baroda, Canara Bank, IndusInd Bank and Kotak Mahindra Bank surged between 4 and 6 per cent.
Further, credit rating agency Moody's said, in its latest credit outlook report released on Monday, the government's latest plan to revive the stranded gas-based power generation capacity through imports will help save $16 billion worth of investments and banks, including IDBI, State Bank of India and ICICI Bank are set to be the biggest beneficiaries of the plan.
Bharti Airtel was the top weekly gainer from the Sensex pack. The stock gained by almost 7 per cent. Reports indicated that telecom companies might raise call rates to foot the bill for spectrum bought during a 19-day auction that concluded last week.
WEEK AHEAD
Global cues, fourth quarter earnings, liquidity conditions in the market and overall investment trend of foreign funds will largely dictate trend on the bourses.
The data on Services PMI is due on Monday, while investors will closely watch the Reserve Bank of India's monetary policy review on April 7.
Further, February IIP data will be released on 10 April. On global front, FOMC minutes and US jobless claims will be in focus.
