The Sensex advanced 0.8% this week at 27,324, after adding 0.4% in Friday’s trade. The Nifty ended with gains 0.9% for the week. Broader markets witnessed a sharper rebound with BSE Mid- and Small-cap indices rising 2-3% each.

Banking stocks climbed over 2% on speculation that the RBI may cut rates following lower inflation. Data this week showed India’s retail and wholesale-price inflation fell than estimated, raising hopes that central bank governor Raghuram Rajan will reduce interest rates for a third time this year.

Consumer prices climbed 4.87% in April from a year ago, compared with 5.17% in March, data showed Tuesday. Wholesale prices declined 2.65% from a year earlier in April, data showed Thursday.

The country’s largest lender, State Bank of India (SBI) was the best performer on the Sensex. The stock jumped 8.7% this week. Bank of Baroda (BoB) gained 10.34% during the week.

Auto companies also featured on the positive side. The index was top performer this week led by Hero Moto (+8.87%), M&M (+5.16%) and Bajaj Auto (+1.9%) and Maruti Suzuki (+1.6%).

Realty, metal and technology stocks were in the red for the week, with DLF declining 6.7% this week.

“The market has shown signs of stability on week-on-week basis, even as the intra-week volatility has been exceptionally high, it is yet early to assume that the short-term trend for the market has reversed for good. Thus, traders should continue to exercise caution and adopt disciplined trading actions. As for investors, there are stocks available across sectors at attractive medium-to-long-term valuation, which should be accumulated,” said Hitesh Agrawalof Reliance Securities.

Indian equities declined more than 10% since April with benchmark indices falling to five-month lows amid concerns about the pace of earnings growth and delays in the passage of economic legislation in the Parliament.

Foreign funds have been net sellers in 13 of the past 15 sessions, taking outflows in May to $723 million, the most among Asian markets tracked by Bloomberg.

As a result, Indian equities turned the worst performing markets from the top spot with year-to-date returns of -0.6%.