Consequently, both the key indices gained approximately one per cent each, as healthy buying was witnessed in banking, automobile and metal stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 80 points or 0.93 per cent to 8,672.15 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,919.95 points, closed at 28,152.40 points -- up 292.80 points or 1.05 per cent, from its previous close at 27,859.60 points.
The Sensex touched a high of 28,203.27 points and a low of 27,900.91 points during the intra-day trade.
However, the BSE market breadth was slightly tilted in favour of the bears -- with 1,397 declines and 1,261 advances.
On Thursday, the benchmark indices had closed marginally in the green, buoyed by short covering and value buying.
The barometer index had risen by 84.72 points or 0.31 per cent to 27,774.88 points, while the Nifty inched up by 16.85 points or 0.20 per cent.
Initially on Friday, the key indices opened on a higher note following strong cues from the Asian and the US markets.
Asian markets traded on a firm note, a day after the US indices recorded a new closing high on the back of healthy rise in global crude oil prices.
Besides, the upward trajectory was supported by better-than-expected Q1 (first quarter) results of the banking major State Bank of India (SBI).
However, gains were capped over the caution on key macro-economic data numbers which were scheduled to be released after the market hours.
Key macro-economic data numbers, such as the factory output data -- Index of Industrial Production (IIP) -- for June and inflation figures for July were expected to be released on Friday.
In addition, a slight depreciation in rupee's value hampered the rise of the equity markets.
The rupee weakened by four paise to 66.89 against a US dollar from its previous close of 66.85 to a greenback.
"Key indices were lifted on the back of fresh buying support. Healthy buying was triggered by firm Asian markets, higher crude oil prices and positive quarterly results," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"However, negative European markets and caution over the upcoming macro-economic data capped gains."
Nitasha Shankar, Senior Vice President for Research with YES Securities, said PSU (public sector banks) bank stocks fuelled the late rally after SBI posted better than expected results.
"The broader markets ended the day's trade marginally higher underperforming the headline indices. Midcap index ended higher by 0.40 per cent while the smallcap index ended on a flat note," Shankar said.
"Market breadth turned in favour of the bears in late trade as profit booking dragged stocks lower," she added.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, CNX Nifty held the gains throughout the session and closed firm.
"Bank Nifty also traded firm throughout the session and closed firm. Banking and auto stocks traded with firm sentiments, while IT and pharma stocks witnessed mix sentiments due to profit booking," said Desai.
"Aviation stocks traded with sideways sentiments while sugar sector stocks traded volatile due to profit booking. FMCG stocks faced resistance at higher levels due to profit booking."
In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 1,203.71 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 392.47 crore.
Sector-wise, the S&P BSE banking index augmented by 433.78 points, followed by the automobile index, which surged by 226.89 points, and the metal index rose by 121.49 points.
On the other hand, the S&P BSE IT index declined by 48.44 points, the technology, entertainment and media (TECK) index fell by 22.20 points and the healthcare index slipped by 13.38 points.
Major Sensex gainers during Friday's trade were: SBI, up 7.16 per cent at Rs 243.20; Axis Bank, up 3.99 per cent at Rs 590.75; Tata Motors, up 2.58 per cent at Rs 515.25; Power Grid, up 2.24 per cent at Rs 177.90; and Reliance Industries, up 2.22 per cent at Rs 1,034.95.
Major Sensex losers were: Infosys, down 1.28 per cent at Rs 1,063.30; Cipla, down 1.26 per cent at Rs 516.65; Sun Pharmaceuticals, down 0.88 per cent at Rs 801.80; Asian Paints, down 0.57 per cent at Rs 1,137.95; and Hindustan Unilever (HUL), down 0.28 per cent at Rs 930.65.
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