BENGALURU, March 22 (Reuters) - Indian shares advanced on Friday, posting weekly gains, helped by a rally fuelled by investor optimism around the Federal Reserve sticking to its rate-easing stance this year.
The blue-chip NSE Nifty 50 (.NSEI), opens new tab index ended 0.39% higher at 22,096.75, while the BSE Sensex (.BSESN), opens new tab added 0.26% to close at 72,831.94.
For the week, both benchmarks logged gains of about 0.3%, led by auto and realty stocks.
"Markets are rejoicing on clarity from the Fed on rate cuts, and this will continue for a few more sessions," said Neeraj Dewan, director at Quantum Securities.
Auto stocks (.NIFTYAUTO), opens new tab jumped 1.67%, taking weekly gains to 4.23%.
Mahindra and Mahindra (MAHM.NS), opens new tab, Maruti Suzuki (MRTI.NS), opens new tab, Tata Motors (TAMO.NS), opens new tab, Hero MotoCorp (HROM.NS), opens new tab, Bajaj Auto (BAJA.NS), opens new tab and Eicher Motors (EICH.NS), opens new tab added between 2% and 8% this week.
"The drop in Brent crude prices after hitting nearly $88 per barrel earlier in the week has aided auto stocks, for whom crude is a key raw material," Dewan said.
The Fed's dovish commentary aided domestic rate-sensitive sectors, including auto and realty, on hopes that India's central bank could begin cutting rates in the second-half of 2024, Dewan added.
Realty stocks (.NIFTYREAL), opens new tab gained 5.34% this week, while metals (.NIFTYMET), opens new tab added 4.21%.
JSW Steel (JIST.NS), opens new tab and Tata Steel (TISC.NS), opens new tab jumped 4%-7.5% this week on strong China data on Monday and the fall in the U.S. dollar on Thursday after the Fed's commentary.
U.S.-rate sensitive IT stocks (.NIFTYIT), opens new tab, however, lost 6.17% despite the positive commentary, weighed down by Accenture's revenue forecast downgrade for fiscal 2024.
Wipro (WIPR.NS), opens new tab, Tata Consultancy Services (TCS.NS), opens new tab, HCLTech (HCLT.NS), opens new tab, LTIMindtree (LTIM.NS), opens new tab and Infosys (INFY.NS), opens new tab fell 3.5%-8% for the week.
The broader small- (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab rose about 1.4% each this week, outperforming the benchmarks.
"While Fed positivity spilled over to broader markets, small- and mid-caps are not out of the woods yet as high valuations still remain a concern," said Avinash Gorakshakar, head of research at Profitmart Securities.
Domestic markets will be closed on Monday for a holiday.
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Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Sohini Goswami, Sonia Cheema and Janane Venkatraman
