Indian shares closed 1.41 percent higher on Friday, snapping two days of losses, as investors were lured by expectations of stronger economic growth. The benchmark 30-share Sensex index rose 236.2 points to 17,021.85. "The undertone is still strong, backed by India's economic growth story," said Hitesh Agrawal, head of research at Angel Broking.
Last week, domestic economic data showed that industrial output rose by a better-than-expected 9.1 percent in September from a year earlier. Indian markets have seen a surge in foreign capital flows this year, which have pushed the Sensex up over 76 percent and the rupee to a one-year high against the dollar.
Foreign funds have bought shares worth 15.38 billion dollars so far this year - the second highest amount ever - after selling stocks worth 11.9 billion dollars in the same period last year, latest data showed. Overseas funds pumped a record 17.23 billion dollars into India in 2007.
Gainers led losers 1,453 to 1,237 on turnover of 53.71 billion rupees (1.15 billion dollars). Dhampur Sugar Mills Ltd rose 3.55 rupees, or 2.62 percent, to 139.2 and Shree Renuka Sugar rose 3.65 rupees, or 1.61 percent, to 230.2 rupees. Tata Steel, rose 14.3 rupees, or 2.66 percent, to 551.6 while Mahindra and Mahindra rose 25.1, or 2.47 percent, to 1,039.75. Reliance Industries, an index heavyweight, rose 43.2 rupees, or 2.07 percent, to 2,125.15.