The Sensex rallied around 5% on Friday to register its biggest increase during the last three months on account of hopes for a recovery in the battered US banking system boosted investor confidence throughout the world.

Chinese Premier Wen Jiabao stated that the country prepared plans to inject more stimulus into its financial system if required while Citigroup Inc chairman Richard Parsons announced that the banking institution did not require any more capital injections from the administration and showed confidence that Citi would remain in private hands.

The 30-share BSE Sensex gained 412.86 points to 8,756.61, its largest one-day percentage gain since last Dec 10, on hefty buying by foreign funds as well as domestic institutions.

The broader S&P CNX Nifty index of the National Stock Exchange (NSE) shut shop at 2,719 points, about 3.8 percent higher than last week's close.
Broader market indices like the BSE midcap index surged 54.06 points, whereas the BSE smallcap index gained 22.23 points.

For the week ended Feb. 28, 2009, inflation declined to over a six-year low at 2.43% as against 3.03% a week ago, mainly due to fall in the prices of manufactured products and some food items.

Index for industrial production (IIP) saw a negative growth of 0.5% during January 2009 as against negative growth of 2% during the previous month.

While commenting on the market, stock market analyst Vishwas Agarwal said that 8,555 is a vital support for further upmove on BSE, whereas 8,786 level is a must sustain level.
Sharp surge on Friday will bring some profit booking on Monday, but the stock markets are likely to be volatile and give trading chances to traders.

“Reliance group and banking stocks will lead the market on either side during this volatile session. Current upmove will continue till March 20 and 21 and again then market may see some correction so trade accordingly,” Mr. Agarwal added.