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BENGALURU  - Indian shares closed higher on Friday, logging a weekly gain, boosted by a rise in heavyweight financial and IT stocks, and as easing inflation data raised hopes of a slowdown in rate hikes.

The Nifty 50 closed 0.55% higher at 17,956.60 and Sensex rose 0.51% to 60,261.18, with both benchmarks reversing losses in a volatile session.

The indexes opened higher but ended lower in the previous three sessions, but still managed to rise over 0.5% this week, following a loss of nearly 1.5% in the first week of the year.

Ten of the 13 major sectoral indexes logged gains, with IT and financials rising 0.74% and 0.57%, respectively.

With IT companies' earnings out of the way, the focus now shifts to financials, with HDFC Bank, the country's top private lender, due to report results on Saturday.

The sector will likely report strong earnings, aided by healthy credit growth and improved asset quality, said G Chokkalingam, founder of equities research and advisory firm Equinomics.

Meanwhile, data on Thursday showed that inflation in both India and the United States eased last month, boosting expectations that the central banks in each country could slow the pace of rate hikes.

The Reserve Bank of India would likely hike rates only by another 25-50 basis points, Chris Wood, global head of equity strategy at Jefferies, said in his Greed & Fear newsletter.

Analysts, however, cautioned that volatility in markets would continue as foreign institutional investors (FIIs) siphon funds out of the country due to the high valuations of domestic firms compared with their emerging market peers.

Foreign portfolio investors (FPIs) have taken out more than 137.21 billion rupees ($1.69 billion) from Indian equities this year through Jan. 12, according to official data. ($1 = 81.3250 Indian rupees)