Analysts also felt that the poor showing in the industrial production data, which showed a slowing down in the growth to 2.7 percent for May, against 4.1 percent in April, to make the central bank to sit up and look at ways to push growth.

"The markets are hopeful of a rate cut from the Reserve Bank of India (RBI) in its upcoming monetary policy review in August," Anand James, co-head, technical research desk, Geojit BNP Paribas, told IANS.

As regards the cabinet decision on dealing with sectoral caps, Vaibhav Agarwal, vice president and research head, Angel Broking, said: "The market is now awaiting further clarification on the composite cap decision. The decision had already led to a rally in banking stocks."

The move removes the distinction between foreign portfolio investors, foreign direct investment and investments by non-resident Indians in computing the caps that are imposed on foreign equity in some sectors.

Gaurav Jain, director with Hem Securities, said: "Markets closed the week on a strong note due to various factors like plummeting oil prices, European Union bailing out Greece,and the Greek parliament also passing the austerity measures, as required."

He said the next major trigger will be the monsoon session of parliament starting from July 21.

"There are high expectations on the passage of GST (goods and services tax) and land bills. The two bills are currently under preview of the parliamentary select committees," Jain said, as analysts said this will be one of the most far-reaching reforms in recent years.

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