Indian shares prices closed 4.4 percent higher on Friday, in line with firmer Asian markets after the US Federal Reserve signalled it may pause in its rate hiking cycle, dealers said.
They said choppiness may be seen in the Indian markets ahead with India's central bank expected to raise short-term interest rates next month to curb inflation which hit a 13-month high on Friday, rising to 5.44 percent.
The US Federal Reserve lifted its benchmark rate Thursday for the 17th straight time by a quarter point to 5.25 percent but dealers said markets interpreted its policy statement as a hint the Fed may pause in its credit tightening campaign.
The benchmark 30-share Sensex index opened up 1.5 percent with the buying momentum sustained by local funds and finally closed with a gain of 447.09 points or 4.4 percent at 10,609.25.
Metal, automobile and engineering stocks were the biggest gainers. "This was a sharp-run up with the optimism that US interest rate hikes could slow," said Atul Hatwar, dealer at brokerage Crosseas Securities.