Consequently, the key indices closed the day's trade with substantial gains as healthy buying was witnessed in automobile, banking and capital goods stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) surged by 132.05 points, or 1.54 per cent, to close at a new 15-month high at 8,683.15 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,810.55 points, closed at 28,078.35 points -- up 363.98 points, or 1.31 per cent, from the previous close at 27,714.37 points.
The Sensex touched a high of 28,110.37 points and a low of 27,795.74 points during intra-day trade.
The BSE market breadth was skewed in favour of the bulls -- with 1,831 advances and 907 declines.
On Thursday, both the indices ended on a flat note due to a fresh bout of buying support and short covering during the last hour of the trading session.
The barometer index had risen by 16.86 points or 0.06 per cent, while the NSE Nifty inched up 6.25 points or 0.07 per cent.
Initially on Friday, the benchmark indices opened on a higher note, in sync with Asian markets.
The domestic markets took positive cues from global indices which traded on a firm note, a day after the Bank of England (BoE) decided to ease its monetary policy.
The BoE on Thursday had reduced its key lending rates by 25 basis points to 0.25 per cent, which is one of the lowest levels in the central bank's 322-year old history.
Besides, value buying and short covering after last two days of corrections lifted the equity markets.
The upward trend was also supported by global credit ratings agency Moody's Investors Service's positive comments on the passage of GST (Goods and Services Tax) constitutional amendment bill.
Further, government's plan to have a long term inflation target of four per cent for the next five years, appreciation in rupee's value and prediction of healthy monsoon rains during August boosted investors' sentiments.
The rupee strengthened by 14 paise to 66.78 against a US dollar from its previous close of 66.92 to a greenback.
However, lower crude oil prices, concerns over the future passage and implementation of the GST bill capped gains.
In addition, caution ahead of major global events risks such as the US jobs data hampered the upward trajectory.
"Short covering after last two day's of correction lifted the equity markets. The upward trend was also supported by BoE's (Bank of England) decision of monetary policy easing," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, CNX Nifty traded with firm sentiments throughout the session supported by lower USD/INR futures prices and fresh buying support.
"Bank, pharma and auto stocks managed to hold their initial gains on strong buying supported, while IT sector stocks faced profit booking at higher levels," Desai said.
"Most FMCG sector stocks witnessed good upside in intra-day, whereas sugar and aviation stocks traded with mixed sentiments."
In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 435.63 crore, while the domestic institutional investors (DIIs) bought scrip worth Rs 616.32 crore.
Sector-wise, the S&P BSE automobile index augmented by 659.05 points, followed by the banking index, which surged by 435.58 points, and the capital goods index rose by 346.13 points.
In contrast, the S&P BSE IT index slipped by 16.67 points, followed by the technology, entertainment and media (TECK) index, which fell by 4.31 points, and the telecom index dipped by 2.35 points.
Major Sensex gainers during Friday's trade were: Hero MotoCorp, up 5.02 per cent at Rs 3,434.30; Bajaj Auto, up 4.38 per cent at Rs 2,859.85; Axis Bank, up 3.62 per cent at Rs 565.45; State Bank of India (SBI), up 3.21 per cent at Rs 232.80; and Tata Motors, up 3.21 per cent at Rs 516.35.
Major Sensex losers were: Sun Pharmaceuticals, down 0.79 per cent at Rs 842.35; Power Grid, down 0.67 per cent at Rs 176.60; Wipro, down 0.65 per cent at Rs 544.85; Bharti Airtel, down 0.56 per cent at Rs 363.20; and Infosys, down 0.44 per cent at Rs 1,067.40.
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