Mumbai (Agencies): After witnessing sharp decline for three consecutive days, the BSE benchmark Sensex on Friday recovered over 265 points to 17,728.61, ignoring weak industrial production data. 

 The Bombay Stock Exchange 30-share barometer resumed the day higher but fell back by over 167 points from its last close to a new 8-month low of 17,295.62 on weakness in Asian
stocks.

But investors began buying in the early afternoon session and Sensex recovered smartly to settle the day at 17,728.61, up 265.57 points or 1.52 per cent. In last three-day fall, it had lost 574.15 points or 3.18 per cent.

Similarly, the NSE 50-issue Nifty also rebound 84.20 points or 1.61 per cent to close at 5,310.00.

The spurt came despite the Index of Industrial Production (IIP) figures on Friday showed that growth dropped to a dismal 1.6 per cent in December 2010, compared to 2.7 per cent in the preceding month and 18 per cent in the same month a year ago.

Interest rate related stocks from banking; consumer durables, auto and realty were in the limelight. IT and Teck indices apart, which closed with minor losses, all the other 11 sectoral indices ended in the green with a gain of between 0.25 per cent and 3.50 per cent.

From the banking segment, Yes Bank, Federal Bank, Axis Bank, BoB, ICICI Bank, PNB, Union Bank, Kotak Mahindra Bank, SBI and HDFC Bank rose between 6.22 per cent and 2.06 pc.