Indian shares are seen rising for a second straight week, with sentiment boosted by a swift and overwhelming response on day one of the nation's biggest public offer, traders said.
"The success of the issue will revive confidence and draw investors back to the market," said Kamlesh Gandhi, a director with Centrum Securities Ltd.
The sale of a 10-percent stake in energy firm Oil and Natural Gas Corp for $2 billion was subscribed more than two times on Friday and traders said the huge demand has eased liquidity worries.
Merchant banking sources said the issue generated tremendous interest from overseas investors and their craze to get a slice of India's growing energy sector is now expected to drive up retail demand.
The 30-issue Bombay share index closed up 1.1 percent on Friday, its highest close since February 18. It rose 3.8 percent on the week and snapped two straight weeks of decline.
But the index is down about six percent from a historic high of 6,249.6 struck in early January. Uncertainty over the elections and a slew of public offers had turned sentiment cautious.
Brokers said the market will be driven up by auto, cement and metal stocks on expectations of continued strong demand, as growth in the Asia's third-biggest economy accelerates.
"Old economy will shine as the strong volume growth in cement and automobiles over the past few months is set to drive up earnings," Raja said.
Over the weekend, India's biggest truck-maker, Tata Motors Ltd, reported a jump of 45.5 percent in February vehicle sales while Ashok Leyland Ltd, the No 2 maker, said it sold 23 percent more vehicles last month than a year earlier.
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