Equity benchmark Sensex rallied over 450 points on the last trading day of 2021 on Friday, led by strong gains in Maruti, SBI and Bajaj Finance.
The 30-share index surged 459.50 points or 0.80 % to end at 58,253.82. Similarly, the Nifty rose by 150.10 points or 0.87 % to 17,354.05.
Titan was the top gainer in the Sensex pack, rising 3.5 %, followed by Kotak Bank, SBI, Maruti Suzuki, Bajaj Finance, HUL, Axis Bank and Sun Pharma.
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On the other hand, NTPC, Tech Mahindra, PowerGrid and Infosys were the laggards.
Bourses in Tokyo and South Korea were closed on Friday. Among others, Hong Kong's Hang Seng rose by 1.24 % while Shanghai Composite gained 0.57 %.
Stock exchanges in Europe were trading with losses in mid-session deals.
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"What a year 2021 has been...The globe recovered from the Covid pandemic but faced another round of virus spread in March. However resilient Nifty kept rising through the year till October and then saw some decent correction. Globally and in India the marketcap on GDP ratio touched an all-time high due to large liquidity flows, low-interest rates, the expectation of early return to normalcy and low returns from other asset classes," Dhiraj Relli, MD & CEO, HDFC Securities, said.
Transition to 2022 will see a more normal monetary policy, and investors could do well to expect more moderate returns from financial markets. Central banks will start to raise rates but remain more tolerant of inflation. Central banks and their assessment of economic conditions will likely be front and centre once again in shaping investment strategies in 2022, he added.
"Post a super show in 2021, valuation levels in Indian equities could make most people cautious on India within EMs and Asia. Indian equities are running into many challenges, including the U.S. rate cycle, rising oil prices, elections in key states, potential Covid wave 3, an upward inflexion in domestic interest rates, rich headline valuations and strong relative trailing performance," Mr. Relli said.
Meanwhile, international oil benchmark Brent crude slipped 0.43 % to $ 79.19 per barrel.
Foreign institutional investors (FIIs) were net sellers in the capital market, as they sold shares worth ₹ 986.32 crore on Thursday, according to stock exchange data.