Moving sideways throughout, the benchmark Sensex managed to close the session with a paltry gain of about 40 points at a one-month high of 24,646.48 on heightened chances of RBI delivering a policy rate cut sooner than later.
On a weekly basis, the Sensex rallied 1,492.18 points, or 6.44 per cent, and Nifty zoomed 455.60 points, or 6.48 per cent -- their biggest weekly gain in more than four years.
Traders said there is considerable improvement in risk appetite after the government kept its deficit target for the next fiscal at 3.5 per cent of GDP in the Union Budget 2016, raising hopes of a reduction in the policy rate.
The 30-share barometer started on a strong footing before settling higher by 39.49 points, or 0.16 per cent, at 24,646.48, a level last seen on February 1. Intra-day, it slipped into the negative zone and hit a low of 24,531.80.
Higher levels could not be sustained as participants locked in gains in blue-chips. The gauge had gained 1,604.99 points in the previous three consecutive sessions.
The gains were led by BHEL, SBI, Coal India, Tata Motors, Cipla, ONGC, Bajaj Auto, Dr Reddy's, ICICI Bank, HDFC Bank, HDFC Ltd, Tata Steel, Infosys, Hero MotoCorp, M&M and Hindustan Unilever.
The NSE Nifty after recapturing the crucial 7,500-mark closed at 7,485.35, up 9.75 points, or 0.13 per cent.
The rupee remained on an upward trajectory and firmed up to 67.12 (intra-day) against the dollar today on increased foreign fund inflows, helping mood brighten further.
Out of the 30-share Sensex pack, 16 ended higher, while 14 led by Sun Pharma, Asian Paints, Wipro, Maruti Suzuki, L&T, Bharti Airtel, TCS, GAIL, RIL and NTPC succumbed to profit-booking.
IT stocks retreated as a stronger rupee adversely affects their earnings and profit-booking at prevailing attractive higher levels.
The BSE metal index jumped the most surging 2.15 per cent, followed by PSU 1.94 per cent, banking 1.28 per cent, power 1.19 per cent, realty 1 per cent and oil & gas 0.40 per cent.
In line with the trend, the mid-cap index rose 1.13 per cent and small-cap 0.75 per cent.
Meanwhile, foreign investors bought shares worth Rs 911.98 crore yesterday, showed provisional data.
Stock exchanges will remain closed on Monday on account of Maha Shivratri.
Key indices like China, Hong Kong, Japan and Singapore ended higher by up to 1.18 per cent following positive US economic data and a bounce in crude oil and commodity prices.
Major stocks in Europe were little changed in their early deals as investors awaited a key US jobs report.
