Sensex rallies; SBI jumps after bad loans stabilise

Mumbai: The BSE Sensex and Nifty rose for a fourth consecutive day on Friday, as State Bank of India surged after bad loans rose only slightly in the previous quarter, with sentiment also underpinned by stable consumer inflation data and stronger global markets.

The Nifty was up 1.5 per cent for the week, snapping two consecutive weeks of falls, after data this week was revised sharply upwards.

Hopes about the economy were further comforted after data on Thursday showed India's retail inflation stayed well below the central bank's target, bolstering prospects for further interest rate cuts.

Investors are hopeful for faster reforms at the government's 2015-16 fiscal budget due on Feb. 28 after the Prime Minister Narendra Modi-led party was routed in Delhi state elections.

"We are optimistically cautious. If the budget really delivers something, we may see further upside," said Daljeet S Kohli, head of research at investment firm IndiaNivesh.

The Nifty added 0.85 per cent to 8,785.85.

The BSE Sensex gained 0.8 per cent to 29,036.80. For the week, the index has gained 1.2 per cent.

State Bank of India led the gains, adding 6 percent, heading towards its biggest single-day gain since May 23, 2014.

The bank said its bad loans as a percentage of total loans were 4.9 per cent for the three months to December 31, compared with 4.89 per cent a quarter earlier. Analysts had expected the number to be higher.

Blue chips also gained after the inflation data and as Asian shares soared on news of a ceasefire accord in Ukraine, Sweden's surprise move to cut its main rate into negative territory, and hopes of a resolution between debt-strapped Greece and its creditors.

Tata Consultancy Services gained 2.6 per cent while ITC Ltd added 0.9 per cent.

Lupin Ltd added 2.9 per cent after the Reserve Bank of India increased the foreign investment limit for the drug maker's shares.