RIL and Infosys that carry nearly 21 per cent weight on Sensex, gained 1.93 per cent and 1.91 per cent to Rs 956.20 a piece and Rs 2,892.75 a piece, respectively.

Brokers said buying activity picked up in the second half of the trading as stocks dipped to attractive low levels amid reports that a fall in crude prices would lower the risk of a higher inflation.

Besides, auto, refinery and metal segments rest all sectoral indices closed the week with sharp to marginal gains between 3.61 per cent and 0.73 per cent.

RIL's stock, which had gained 1.8 per cent till noon, dived after Mukesh Ambani, RIL chairman and managing director, failed to share the company plans on stemming the decline in natural-gas output at the company's AGM.

The banking stocks index suffered the most as ICICI Bank fell 3.10 per cent to Rs 1,051.40 and HDFC Bank declined 1.27 per cent to Rs 2,358.95.

FIIs have so far this year have made a net investment of Rs 13,798.50 crore in the debt market, whereas they have withdrawn Rs 1,901.80 crore from the equities market so far this year, according to Sebi.

Market sentiment was further boosted after Morgan Stanley predicted a rebound for the benchmark index this year. However, a fall in consumer durables, healthcare, realty and oil and gas stocks capped the gains.

Morgan Stanley analysts say the next three to six months may not be very good for the Indian equities market, but it makes a very good investment proposition with a 12-18 months view.

Shares of the company fell to an early low of Rs 85.70 on BSE, down 2.05 per cent from the previous close, while they fell 2.22 per cent on NSE to hit a low of Rs 85.60.

The Sensex, which had lost 34.04 points in the previous session, jumped 1.49 per cent to 18,503.28, with all the sectoral indices closing in positive zone.

The stock settled 5.34 per cent lower at Rs 664.60 on the BSE. M&M reported a 6.36 per cent increase in net profit for the quarter ended March 31, 2011 at Rs 606.54 crore.

The Indian currency had appreciated by 14 paise to close at a week's high of 45.16/17 in Friday's trade against the US currency, on the back of a smart rally in local equities.

Brokers said investors turned cautious on concerns over rising inflation and interest rates, and preferred to book profits in heavy-weight stocks after two-session of gains, reversing an early firm trend.

RIL, the most valuable scrip on the 30-share gauge Sensex, picked 1.40 per cent to Rs 946.30 a share while ICICI Bank gained 4.23 per cent to Rs 1,069 a share.

Smooth carry forward of positions for next month contract in the derivatives segment and a firming trend overseas helped calm fears of further rise in interest rates on account of high food inflation.

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The 30-share index ended at 17,847.24 points, a level last seen on March 21. The gauge has lost nearly 13 per cent this year.

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