But battered federal bonds are expected to remain under pressure with nervous investors awaiting an announcement on a scheduled government borrowing of up to 80 billion rupees.
The auction is slated to be held between August 2-9.
The 30-share Bombay Stock Exchange index rallied 1 percent to end at 5,170.32 points on Friday. It gained 1.9 percent on the week on the back of strong quarterly earnings growth and a better outlook for the critical monsoon rains.
"Everyone loves a rising market, and the index could sustain this rally till the 5,300-5,350 levels before it meets with resistance," said C.K. Narayan, a technical analyst at ICICI Securities.
The monsoon is nearly 15 percent below normal so far this year, but the forecast for the rest of the season is good.
"It all depends on how the monsoon plays out, now that earnings are over," said Ajit Surana, director of MSS Securities.
Software services firms will continue to be in focus ahead of the listing of the biggest exporter, Tata Consultancy Services Ltd Its $1.2 billion initial public offering, the biggest yet in India, was fully bid on Friday, the second day of the offer.
Cement and auto makers are also expected to gain in expectation of strong monthly sales numbers, due early in the week. July is typically a dull month for cement as construction activity slows, but a tardy monsoon kept demand high.
India's state-run firms may also gain after they raised retail prices of diesel and petrol on Sunday on the back of soaring global prices.
Bonds are seen extending a weak spell that drove them to multi-month lows last week, but prices are expected to edge lower initially rather than tumble, after authorities tried to restore calm by suggesting that a rising trend in inflation could ease.