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Mumbai: Indian shares climbed 1.8 per cent to their highest close in two months on Friday, as investors shrugged off a spike in inflation and drew comfort from a global equities rally.
Reliance Industries, India's top listed firm, led the rise adding 2.3 per cent to Rs2,674.85 after it said it had signed a deal to buy a 90 per cent stake in an exploration block in Peru.
State Bank of India, the country's largest lender, firmed 2.6 per cent to Rs1,822.15, its best close in more than one and half months, after it beat street expectations with a 26 per cent jump in quarterly net profit.
Rival ICICI Bank rallied 6.4 per cent to Rs935.50, while the sector index gained 3.7 per cent.
The benchmark BSE 30-share index closed up 1.81 per cent, or 312.81 points, at 17,600.12 points, with 27 components in positive territory. It was the highest close since February 28.
"We are seeing FII [foreign institutional investor] money coming into our markets right now, which will help it sustain at current levels," said R.K. Gupta, managing director at New Delhi-based Taurus Asset Management.
18,000 levels
"The market may touch 18,000 levels in a short time, at which we expect some profit-booking to take place."
The index, which is down 13.2 per cent so far this year, rose 2.8 per cent on the week and has gained nearly 19 per cent since its lowest close so far this year on March 17.
The benchmark gained 10.5 per cent in April - its first monthly gain in 2008 and the best performance since October.
In the broader market, 1,396 gainers beat 1,304 losers on volume of more than 367.5 million shares.
Data showed India's annual inflation rate rose 7.57 per cent in the 12 months to April 19, its highest in more than three and half years, while the finance minister said more steps would be taken if needed to tackle rising prices.
On Tuesday, the central bank raised the proportion of deposits that must be set aside by banks to a seven-year high of 8.25 per cent.
Maruti Suzuki India rose 6.2 per cent to Rs788, after its April vehicle sales jumped by almost 24 per cent from a year ago.
The 50-share NSE index ended 1.21 per cent higher at 5,228.20.
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