Analysts and market traders say the overall market sentiment is also likely to get a boost from the expected arrival next week of the crucial monsoon rains in the country.   

The stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed Friday at 6,707.72, representing a whopping gain of 208.22 points or 3.2 percent over its previous week's close.

The market closed in the positive zone for the fourth consecutive week as institutional investors picked up new as well as old economy shares at attractively lower levels.

The market index is trading at nearly six percent lower from its all time high of 6,954.86 touched on March 9, 2005.

"If monsoon rains hit the country next week, it will come as a major boost to the stock market and especially to the shares of consumer goods companies," Deepak Shah, a senior analyst with Pranav Securities, told IANS.

The June-September monsoon rains are crucial for Indian agriculture, which accounts for one-fourth of the country's total economic output and provides employment to nearly 70 percent of the country's population.   
 
India's economy grew by 6.9 percent in the fiscal year ended March 31 on top of a higher increase of 8.5 percent in the previous year on increased agriculture production.

"The coalition government's decision to revive the stalled divestment programme despite opposition from some of its allies will boost the market in the near term," said Ambareesh Baliga, vice president of Karvy Stock Broking.

The United Progressive Alliance (UPA) government Thursday cleared the proposal to dilute 10 percent of its stake in Bharat Heavy Electricals Ltd (BHEL). This is the second stake sale in a public sector unit by the UPA government that completed one year in power last week.

In October last year, the initial public offering of state-run National Thermal Power Corp (NTPC) - one of the leading players in the country's power sector - was floated. The issue had received massive response from investors.

Analysts say the successful completion of the BHEL issue would enthuse the government to tap the public offering route for the divestment of more public sector firms in the months ahead as the stock market index soars higher.

Other leading state-run firms that are likely to tap the market for divestment of stake include Power Grid, Shipping Corporation, Engineers India, and Power Finance Corp.

Unlisted companies like domestic aviation major Indian Airlines and national flag carrier Air-India are also gearing up to tap the stock market to raise resources to compete with the more resourceful private companies.

In the intra-week trade ended Friday, the stock market opened for the week Monday on a positive note as institutional investors picked up equities on company specific developments.

The bullish sentiment continued all through the trading week, pushing the index sharply higher.