REUTERS - Indian stock markets rose about 0.7 percent on Friday, heading for their third successive weekly gain, as overseas investors continued pumping money into the emerging markets following the dovish stances by global central banks.
The Bank of Japan on Tuesday agreed to continue its massive asset buying programme at existing levels while the U.S. Federal Reserve on Wednesday signalled fewer rate hikes this year.
The dovish approach is expected to spur more foreign flows to emerging markets including India. Foreign investors have bought a net $1.77 billion of shares so far in March, but still remain net sellers of $1.1 billion this year.
Analysts also expect the Reserve Bank of India to cut interest rates by 25 basis points at its policy review on April 5 after data on Monday showed inflation easing more than expected in February.
"Its time for the RBI now to announce a rate cut after global central banks announcements and that would bring in more flows into our market," said K K Mital, head-portfolio management services at Globe Capital Market.
The broader Nifty was up 0.42 percent at 7,543.85 at 1.34 p.m., while the benchmark BSE Sensex was up 0.43 percent at 24,783.16.
Both the indexes have gained 0.3 percent this week.
Blue chips, which are heavily owned by foreign investors were among the leading gainers, with Infosys and State Bank of India (SBI) up 1 percent each.
LT Foods, maker of "Daawat" brand of rice, rose 8 percent after the company agreed to buy branded rice business of Hindustan Unilever for 205 million rupees ($3.1 million).
Miner NMDC gained 1.5 percent ahead of a surprise board meeting on March 19 to consider a second interim dividend.
Software maker Tata Consultancy Services rose 2.4 percent following a meeting with analysts on digital business. ($1 = 66.6400 Indian rupees)
(Reporting by Aastha Agnihotri in Bengaluru; Editing by Anand Basu)
