Indian shares surged 1.68 percent to a record close on Friday as Reliance Power's upcoming public offering lifted sentiment, but Tata Motors fell after being named the front-runner for Ford's luxury brands.
The benchmark BSE 30-share index ended up 341.69 points at 20,686.89, with 16 components rising, and rose 2.4 percent over the week.
The index rose as much as 2.05 percent to a record high of 20,762.80 during trade, comfortably surpassing the previous peak of 20,529.48, which was set on Wednesday.
"I think liquidity is helping the markets in the new year and Reliance Power initial public offering is definitely boosting the sentiments," said Suraj Saraogi, director at brokerage Keynote Capital.
Reliance Power, 50 percent owned by Reliance Energy Ltd, plans to raise up to $3 billion in an initial public offering this month, making it India's biggest-ever IPO.
Still, investors took some profit in Reliance Energy. The stock ended down 0.3 percent at 2,510.35 rupees, having risen as much as 2.2 percent during trade, but still gained 16.5 percent over the week.
"With such big IPOs coming, the market does not look weak. I think next week also we should see a rise of another 200-300 points from this level, with corporate results also helping." Saraogi said.
Firms start reporting December quarter results next week.
The main stock index rose 47.1 percent in 2007, its strongest gain in four years, but large-cap stocks were laggards in the last part of the year.
"Mid caps have fared well in the last few months. So I think, there's a catching-up game happening in the markets with the large caps now performing," said Neeraj Dewan, director at Quantum Securities in New Delhi.
Leading private bank ICICI Bank, which rose 4.7 percent to a three-week closing high of 1,285.35 rupees, contributed most to the index's rise. Saraogi said he had heard a foreign institutional investor was a heavy buyer of the stock.
ICICI, valued at more than $36 billion, is planning a $3 billion push into overseas markets this year and next to help clients fund overseas takeovers and investments, the U.K. Daily Telegraph reported on Friday.
In the broader market 1,474 gainers narrowly edged 1,417 losers in volume of almost 760 million shares.
The 50-share NSE index closed 1.55 percent up at a record close of 6,274.30, after hitting a record high of 6,300.05 during trade.
Elsewhere in the region, Karachi's 100-Share index gained 1.88 percent to 14,259.59, but Colombo's All-Share index dropped 0.77 percent to 2,510.40, it lowest close since Dec. 20.
STOCKS THAT MOVED:
* Shares in Tata Motors fell 1.25 percent to 784.30 rupees, reversing early gains. Ford Motor said on Thursday it had selected India's top bus and truck maker as the lead candidate to buy its Jaguar and Land Rover brands.
Analysts were uncertain whether the deal would be positive or negative for the Indian firm.
* Dhanalakshmi Bank Ltd rose by its daily limit of 5 percent to 131.25 rupees after the private sector lender said its board would meet on Jan. 14 to consider a rights share issue.
MAIN TOP THREE BY VOLUME:
* Centurion Bank of Punjab on 37.5 million shares
* Burnpur Cements Ltd on 30.1 million shares.
* Hindustan Motors on 26.6 million shares
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