Mumbai, (Agencies): A host of positive factors helped both the key indices, Sensex and Nifty, to snap its three week of losing streak during the week under review and rallied by nearly 2.8 per cent on the back of smart rise in banking, metal and capital goods stocks.

After giving up a massive 1,278.92 points or 6.73 per cent in the last three week, the benchmark Sensex bounced back with vengeance on hectic short-coverings amid taking fresh positions ahead of the Union Budget to be announced on February 28 and also expiry of February series on coming Thursday.

The Bombay Stock Exchange 30-share barometer resumed the week higher and remained in positive terrain through out the week and ended up by 482.91 points or 2.72 per cent.

Similarly, the NSE 50-issue Nifty also shot up by 148.95 points or 2.81 per cent to end the week at 5,458.95.

Sentiment was so strong that 12 out of 13 sectoral indices closed with gains. Second-line counters also attracted good buying support at lower level from retail investors.

Realty stocks were only at the receiving end following concerns over recent scams.

General inflation as well as food inflation showed signs of coming down, mainly easing concerns of further hike in interest rates. The general inflation declined to 8.23 per cent in January 2011, from 8.43 per cent in last month and the Finance Minister expressed hope that the overall inflation will come down to 7 per cent by March end.

Food inflation fell for the second straight week to a two-week low of 11.05 per cent for the week ended February 5, against 13.07 per cent in the previous week, providing slight relief to the market participants.

Market regulator SEBI's decision to probe the recent fall in stock markets and Egyptian President Hosni Mubarak's decision to step down also helped to boost investors' sentiment.

Foreign Institutional Investors (FIIs) turned net buyers in the week as they bought shares worth Rs 697.77 crore during the week, including provisional data of February 18.

Overall, 21 out of 30 index based counters closed with gains, while others ended with losses. From banking segment, SBI shot up by 6.60 per cent, HDFC Bank by 5.43 per cent and ICICI Bank by 2.40 per cent.

Steel major Tata Steel flared up by 7.21 per cent on excellent third quarter performance. Jindal Steel also jumped by 9.77 per cent.

"Although we have recovered smartly after a three-week drubbing, doubts still persist about the continuation of the rally. So, be careful and tread cautiously even as the bias remains positive for now," said IIFL Head of Research Amar Ambani.