The key triggers for the Sensex rally were the softening trend in inflation, indications of interest rates having peaked, the rally in global stock markets and expectations of good quarterly results. “The fall in inflation below the five per cent level boosted the sentiment in the last a few weeks,” said stock dealer RA Poddar.

Though IT stocks led the bull rally on Friday, analysts expect disappointing Q1 results from IT firms due to the appreciating rupee, impact of wage hike and higher visa costs. But some reckon that the negatives about Q1 results are already priced in and the sector’s underperformance offers a good buying opportunity as core business metrics of the IT sector remain buoyant. IT bellwether Infosys kickstarts the Q1 earnings season on July 11.

Wipro rose 3 per cent, while Satyam was the biggest gainer among IT stocks, with a rise of 5.4 per cent. Discounting the inflation factor, which rose to 4.13 per cent as of June 23, foreign funds have been consistent buyers in blue chip counters since June 30.