The BSE Sensex closed 337 points higher on Friday tracking a rally in global shares, led by gains in blue-chip shares such as Reliance Industries that gained after CLSA raised its target price.
Banks shares also gained on hopes the Reseerve Bank of India (RBI) may cut rates on September 17 if the government announces reform measures next week.
ICICI Bank gains 4.6 percent, while Reliance Industries gains 3.07 percent.
The BSE index rose 1.95 percent. The 50-share NSE index ended up 1.98 percent.