Indian shares 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 the sentiment also underpinned by stable consumer inflation data and stronger global markets.

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 February 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 50-share NSE index Nifty jumped 93.95 points or 1.08 per cent to 8,805.50.

India's NSE index was up 1.5 per cent for the week, snapping two consecutive weeks of falls, after data this week was revised sharply upwards.

The 30-share BSE index Sensex surged 289.83 points or 1.01 per cent to 29,094.93. For the week, the index has gained 1.2 per cent.

State Bank of India led the gains, adding nearly 8 per cent, 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 pe rcent 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 3.08 per cent while ITC Ltd added 2.01 per cent.

Lupin Ltd added 3.66 per cent after the Reserve Bank of India increased the foreign investment limit for the drug maker's shares.

Barring realty, oil & gas and infrastructure, all other BSE sectoral indices ended in the green.

Among them, FMCG index gained the most by 1.77 per cent, followed by healthcare 1.56 per cent, banking 1.32 per cent and auto 1.08 per cent. On the other hand, realty index was down 0.95 per cent, infrastructure 0.27 per cent and oil & gas 0.16 per cent.

European stocks rose in early trading on Friday, helped by positive growth figures from Germany, while L’Oreal rallied after posting forecast-beating sales growth.

Asian shares gained on Friday on news of a ceasefire accord in Ukraine, while Sweden’s surprise move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished the risk appetite.

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