The BSE Sensex rose a tad on Friday, hitting earlier a five-month high, as ITC recovered from the prior day's falls although power utilities dropped after the Comptroller and Auditor General (CAG) found irregularities in the government's coal allocation and usage.
The auditor accused the government of allocating coal blocks, power projects and land for New Delhi's flagship airport at a fraction of market prices. That sent shares of companies it accused of unduly benefitting, such as Reliance Power
However, analysts said the impact would likely be limited given the report would mark the beginning of a long process, while the pressure was expected to focus mainly on the government in the near term.
Instead, investors are more focused on potential measures from the government, including on fiscal consolidation and on attracting foreign investment, which are considered critical for stock indexes that this week posted their third consecutive weekly gain.
"I expect some move from the government on reform front as manufacturing is slowing and deficit is growing. There is no choice: government has to do reforms like FDI and passage of insurance bills," said G. Chokkalingam, Executive Director and Chief Investment Officer at Centrum Wealth Management.
The BSE Sensex ended up 0.19 percent at 17,691.08 points on Friday, after earlier hitting its highest since March 16.
The index rose 0.8 percent for the week.
The Nifty rose 0.06 percent to end at 5,366.30 points.
Domestic shares have managed to post mild gains this week, driven by gains in individual shares and sectors, despite renewed worries about inflation after Brent crude futures rallied to three-month highs.
RELIANCE POWER DROPS
Shares in Tata Motors
Software service exporter Infosys
However, Reliance Power
Additions and deletions from the NSE index were also in focus on Friday.
The changes will be effective late next month.