Foreign institutional investors (FIIs) purchased shares worth $71.23 million on Friday, after having sold $56 million in the previous two sessions, showed provisional data from stock exchanges. Domestic funds sold R135.50 crore ($23.16 million), data showed.

SBI jumped 9.7% — the biggest single-day gain in nine months — to its highest level in three years after the state-owned lender posted stellar fourth quarter results, which saw the bank surpass expectations on interest margins, asset quality, expenses and deposit growth.

The Sensex surged 1.3% on Friday to a new high of 24,693.35 and the Nifty gained 1.25% to settle at a new peak of 7,367.10, driven by banks and cyclical stocks. Friday's gains also helped Indian equities top the Asian charts in CY14.

The Nifty has given positive returns of 16.86% so far this calendar year in dollar terms, surpassing Jakarta Composite (16.35%), New Zealand's NZX 50 (8.75%) and Stock Exchange of Thai Index (7.56%), Bloomberg data showed.

Foreign funds, which have been driving Indian markets for over a decade, have now invested $7.66 billion so far this year — the second highest among Asian and emerging markets (EMs), Bloomberg data show. Japan has received FII inflows worth $23.69 billion since January 2.

“Election results were much better than expectations. I do not think anybody was expecting such a performance from the BJP, and this has been a very big positive surprise for the markets. I think this would very much keep foreign inflows coming into India... We are clearly getting into a long bull market,” said Andrew Holland, CEO, Ambit Investment Advisory.

Benchmark indices reported positive gains for the second week in succession, with 2.2% to 2.3% rise from last week.

However, broader markets were in the focus point of investors. The BSE MidCap and SmallCap indices surged between 11.5% and 16% during the week.

BSE Realty index was best performer this week. The index surged a whopping 23.13% this week, making the gauge of property developers to second best performing sectoral index amid hopes of a sharp pick-up in infrastructure spending.

BSE Capital Goods, Consumer Durables, Oil & Gas, Metals and Automobile indices also posted handsome gains as the Street readies for policy reforms from the new government that many anticipate as the mark of the next bull run.

Lanco Infratech has gained 81.53% this week and Pune-based wind power company Suzlon Energy has risen 65.32% from last week's closing. The BJP government, in its manifesto, talked about setting up world-class investment and industrial regions, and also stressed on building 100 new cities across India, enabled with the latest technology and infrastructure.

Among the front line stocks, Sesa Sterlite was the best performer in the last five sessions with 24.61% gains.

NTPC (21.61%), Bharat Heavy Electricals (18.77%), Tata Power (16.72%) and Coal India (15%) completed the list of top five gainers.

Defensives continued to lose steam for the third consecutive week. CNX IT index declined 1.8%, while BSE FMCG index was down 2.42%. BSE Healthcare index was down 2.42%. Sun Pharma (-4.64%), ITC (4.3%) and Dr Reddy's Laboratories (4.2%) were the biggest losers this week.