Mumbai: The benchmark equity index gained the most this week in nearly six months, recording a new high as focus turned to June quarter earnings. Relative stability in world markets also supported the local market.

BSE’s 30-share Sensex gained 2.48% this week to a record close of 36,541.63 points, the best since the week to 19 January.

On Thursday, Sensex rose as much as 1.2% to a record high of 36,699.53 points. On Friday, it shed 6.78 points to close at 36,541.63.

“I think we have already seen the upside in the market. There is a skew in the market in favour of the large cap," said Dhananjay Sinha, head of research at Emkay Global Financial Services Ltd.

While benchmark equity indices recorded new highs on Thursday, the rally is tilted in favour of a handful of stocks, and is far from being a broad-based one.

The market temporarily shrugged off concerns over a global trade war, but that could weigh on the market sentiment in times to come. In the near term, the market is likely to take cues from domestic earnings, as it waits for signs of concrete recovery.

“The earnings season is seen as positive for markets, albeit on a low base and could help the market in the in the short term," said Sinha.

So far the earnings of three large-cap companies point to a bias towards a positive earnings growth scenario.

Top IT firm Tata Consultancy Services Ltd (TCS) kicked off the fiscal first-quarter earnings season by reporting its fastest sequential growth in four years, as the largest banks in the US boosted spending on technology.

India’s second-largest software company, Infosys, reported a 3.7% year-on-year growth in net profit to 3,612 crore in the June quarter, but missed the market’s estimates.

Private lender IndusInd Bank Ltd reported a 23.81% jump in its June quarter net profit on the back of higher net interest income and other income.

“However, the key concerns for the market is liquidity. There is a risk to liquidity and all eyes are on interest rates, currency moves and trade war," Sinha said.

While micros seem to be stabilizing, the macroeconomic situation has continued to bother investors.

Firm crude oil prices, a sliding rupee and the US-China trade war weighed, along with other recent developments.

Data released after market hours on Thursday showed that India’s factory output growth slowed to a seven-month low in May while retail inflation quickened to a five-month high in June, signalling a worsening macroeconomic environment.

Foreign institutional investors have been net sellers of Indian shares for the year so far and domestic institutional investors were net buyers for all the months so far in 2018, infusing a net of 66,474.33 crore in the asset class.