Domestic equity benchmark indices extended gains for the consecutive session on Friday, as investors hoped that the Modi government would to able to pass the Goods and Services Tax (GST) bill in the ongoing winter session of Parliament.
While the BSE S&P Sensex was up 169 points or 0.65% to end at 26,120 points, the 50-share Nifty closed at 7,942 points, up 58 points or 0.75%.
The Sensex opened at 26,003 and hit an intra-day high of 26,185 and low of 26,937 before closing the session above 26,000 levels.
The indices shrugged the weakness off in the global markets, as the investors stepped up buying of shares in the sectors like financials, metal and capital goods.
"After a poor November series, indices have started off the December series on a smooth note. Equity market ended with smart gains on Friday ignoring negative cues from Asian and European markets. Market participants seem to be ignoring the weakening Indian rupee as well," said Amar Ambani, Head of Research, IIFL.
On the global front, the Chinese stock index plunged by about 6% after the reports said that the government has ordered a probe over suspected violation of norms by some brokerages in the country. Other Asian markets also ended lower, with Hong Kong's Hang Seng index ending 1.8% down.
Among the BSE sectoral indices, Bankex, Capital Goods and Finance were the top gainers, while Consumer Durables and Telecom were the biggest losers.
Banking shares rallied after the media reports said the government is looking to set up high-level panel to deal with the growing bad loans of the banks. The non-performing assets of public sector banks increased to 6.03% in the first quarter of this fiscal year compared to 5.20% in the March quarter of 2014-15.
"NPAs are a result of many factors. There is not one silver bullet that is going to deal with them... It will require us to take a multi-dimensional approach." Business Standard quoted Minister of State for Finance Jayant Sinha, as saying.
While shares of Oriental Bank of Commerce, Bank of Baroda, Union Bank of India and Syndicate Bank rallied ended over 5% higher, State Bank of India, IDBI Bank, Andhra Bank, Bank of India, Canara Bank, Punjab National Bank and Allahabad Bank were up in the range of 3-4% each.
Meanwhile, the Indian rupee fell to a two-year against the US dollar amid rising chances of US Federal Reserve interest rate hike next month.