BSE Sensex
BSE SensexReuters

Indian market rose for the week as investor confidence was lifted by hopes that the U.S. Congressional leaders will soon come to an agreement to avert the looming fiscal cliff.

India's BSE Sensex rose 1 percent for the week and closed at 19444.84. Nifty also gained 1 percent and closed at 5908.35 points.

Investors were focusing on the developments in the U.S. to avoid the fiscal cliff, consisting of tax rises and spending cuts, at the beginning of next year. Market players are hoping that President Barack Obama and the Congressional leaders will make advances toward reaching an agreement to avoid the fiscal cliff. Obama will have a series of discussions with the Congressional leaders over the weekend, who are expected to come to an agreement on preventing the economy from falling over and returning to recession.

“Republicans have conceded to an increase in marginal tax rates for high income earners. This is a big symbolic shift. Democrats have conceded to cuts to Medicare and Social Security and dropped a proposal to extend the payroll tax cut. The hard core of Tea Party supporting House Republicans were never going to support any deal that included tax cuts, which means this has to be a bipartisan deal that can be supported by the moderates on both sides,” Capital Economics said in a note.

Investor sentiment also turned positive amid speculation that policymakers in Japan will soon announce more stimulus measures to revive the country’s growth momentum. Bank of Japan is expected to come under more political pressure to announce monetary easing measures as the country’s industrial output fell in November over the previous month indicating that the country’s economy continues to falter.

Data released Friday by the Ministry of Economy, Trade and Industry show Japan’s industrial production, which measures the total inflation-adjusted value of output from manufacturers, mines, and utilities, fell 1.7 percent in November compared to 1.6 percent rise in October. Analysts had expected a decrease of 0.5 percent.

Major gainers: Shares of Tata Motors gained 3.42 percent. Shares of Wipro Ltd rose 3.23 percent. Shares of State Bank of India advanced 1.89 percent.