The BSE Sensex rose 0.57 percent on Friday to its highest close in six weeks, as appetite was bolstered by strong results from software services exporter Wipro (WIPR.NS) and the country's No. 3 private lender Axis Bank (AXBK.NS).
India's No. 3 softwares services company Wipro reported December-quarter net profit rose 10.4 percent, roughly in-line with estimates, sending its shares up as much as 5.2 percent. The shares closed up 2.4 percent.
Larger rival Tata Consultancy Services (TCS.NS) rose 0.4 percent.
Axis Bank (AXBK.NS) rose 5.65 percent to 1,009.05 rupees, its highest close since December 7, after reporting a 24 percent jump in quarterly net profit.
ICICI Bank (ICBK.NS), the country's second-largest lender, rose 5.7 percent to 842.45 rupees, its highest close in more than two months, and bigger rival State Bank of India (SBI.NS) gained 2.6 percent.
First, the global markets are supporting and then we are hoping, that some action will be taken by Reserve Bank of India (in the policy review next week), Neeraj Dewan, director at Quantum Securities.
Whatever results have come, especially for banking, they are more or less better than expectations and there is no disappointment, Dewan said.
Economists polled by Reuters said the Reserve Bank of India would not cut interest rates at the review, but they nearly unanimously expected the central bank to do so by the end of June.
Hero MotoCorp (HROM.NS), the world's biggest motorcycle and scooter maker and smaller rival Bajaj Auto (BAJA.NS) continued to rally on strong December quarter numbers and rose 2.2 and 6.4 percent, respectively.
The 30-share BSE index .BSESN closed up 0.57 percent at 16,739.01, its highest closing level since December 7, with 19 of its components gaining.
The BSE index, which slumped almost a quarter in 2011 as a slew of rate increases to fight inflation crimped spending and hit corporate earnings, has risen more than 7 percent since the new year began.
Morgan Stanley said it expects the Sensex to rise 14 percent in 2012 on the likelihood of better returns on investments and attractive valuations on an absolute basis.
The index gained 3.6 percent in the week, its best weekly performance in 7 weeks.
The Vodafone (VOD.L) judgment is also good for market... it will boost foreign investment in India, Dewan said.
The Supreme Court ruled on Friday that the country's tax office has no jurisdiction over Vodafone's (VOD.L) purchase of mobile assets in India, which comes as a relief to the telecom giant that has been fighting a $2.2 billion tax bill in a long-running dispute.
Energy conglomerate Reliance Industries (RELI.NS) fell as much as 1.7 percent in early trade but recovered to close up 0.89 percent ahead of its quarterly earnings report.
The company, India's largest by market value, is expected to report its first drop in quarterly profit in more than two years, as refining margins narrow and gas output from its offshore fields slows down.
The company may also announce a buy back of shares in an attempt to boost its underperforming shares.
In case of Reliance, the buy back price and the quantum of buyback is more important than the quarterly numbers now, and that has acted as a support to the market, Dewan said.
Diversified ITC (ITC.NS), the country's largest cigarette maker, fell 3.8 percent on concerns about moderating volume growth despite its December quarter net profit rising 22 percent.
The 50-share NSE index .NSEI gained 0.6 percent to 5,048.6. In the broader market, 804 losers were ahead of 634 gainers on a total volume of about 822.2 million shares.
STOCKS THAT MOVED
* Hindustan Construction Co (HCNS.NS), one of India's largest builders, fell 2.54 percent after it reported a loss of 1.3 billion rupees in October-December.
* JSW Steel (JSTL.NS) fell 3.2 percent after its December-quarter net profit more than halved.
* SKS Microfinance (SKSM.NS) fell 5.8 percent after the lender reported a loss for the third consecutive quarter.
TOP THREE BY VOLUME
* Suzlon Energy (SUZL.NS) on 38.09 million shares
* IFCI (IFCI.NS) on 27.35 million shares
* IDFC (IDFC.NS) on 21.64 million shares