By Himank Sharma
MUMBAI (Reuters) - The BSE Sensex and the Nifty rose more than 1 percent to a three-week high on Friday as technology stocks advanced after Infosys raised the lower end of its fiscal year revenue guidance, while property developers gained after the country unveiled new REIT regulations.
Markets also found support in firming hopes of U.S. deal to ensure the country does not default on its debt, which lifted world shares for a second day and put the dollar on course for its first weekly rise in five.
India's industrial output data, due later in the day, and inflation data on Monday are keenly awaited to find more bright spots in the economy after September trade data came in better than expected.
Local shares also found strength on expectations of dollar inflows from India's inclusion in global bond indexes after Reuters reported India was in discussion to gain entry to benchmark indexes for emerging market debt.
The Sensex rose 1.26 percent to close at 20,528.59 points, while the Nifty ended up 1.25 percent higher at 6,096.20 points, both marking their highest close since September 19.
"Indian markets will continue to be driven by global events in the short term. If we get more clarity on extension of timeline for the U.S. debt ceiling the domestic markets will gain from the sentiment," Aneesh Srivastava, Chief Investment Officer of IDBI Federal Life Insurance, said.
Infosys (INFY.NS) shares rose 4.7 percent, closing at their highest level since Jan 12, 2011. Although India's second-largest software services exporter posted a quarterly profit that missed analyst estimates, investors cheered the change to the lower end of its revenue guidance.
Infosys, whose results mark the unofficial start of India's earning season, raised the ante for other IT stocks that rose in tow, with Tata Consultancy Services (TCS.NS) ending 2.02 percent higher and HCL Technologies (HCLT.NS) gaining 3.56 percent.
Investors are now awaiting July-Sept quarter results of blue chips firms to gauge how corporates have fared at a time when economic growth has slowed to its lowest level in a decade.
Shares of real estate developers including DLF (DLF.NS) and Unitech (UNTE.NS) gained after the market regulator announced draft rules to allow the establishment of real estate investment trusts (REITs) in the country.
Network television company TV 18 Broadcast (TVEB.NS) rose 3.6 percent after 5 million shares of the company changed hands in a block deal on the Bombay Stock Exchange, dealers said.
The identity of the buyers and sellers was not immediately known.
Tata Motors (TAMO.NS) gained for the second consecutive day, closing 3.67 percent higher after reporting better-than-expected retail numbers for its Jaguar Land Rover business.
However, Coal India (NSI:COALINDIA.NS - News) shares fell 3.88 percent after local media reported that the federal government was moving to sell an additional 5 percent stake in the public sector company, citing unnamed sources.
(Reporting by Himank Sharma; Editing by Rafael Nam and Sunil Nair)