In a volatile trade session, a benchmark index of Indian equities market Friday closed trade 158 points or 0.60 percent up after international ratings agency S&P Friday revised India's credit outlook to 'stable' from 'negative'.
Healthy buying was observed in bank, metal, capital goods, healthcare and automobile sectors, whereas selling pressure was seen in information technology (IT), fast moving consumer goods (FMCG) and technology, entertainment and media (TECK) sectors.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,429.30 points, closed at 26,626.32 points, up 157.96 points or 0.60 percent from the previous day's close at 26,468.36 points.
The Sensex touched a high of 26,721.03 points and a low of 26,220.49 points in the intraday.
The equities market reacted positively to the rating upgrade. Standard and Poor's revised India's credit outlook to 'stable'.
The rating agency said it revised India's rating from earlier 'BBB-' as it expected the government to keep its fiscal consolidation targets.
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The S&P said: "The outlook indicates government can implement fiscal and economic reform. Rating outlook revision shows improved political setting."
"Political setting offers conducive environment for reforms. Government reform pick-up may let RBI (Reserve Bank of India) draft effective policy."
Finance Minister Arun Jaitley is sticking to the target of fiscal consolidation under which he aims to bring it down to 3.6 percent of the GDP by 2015-16.
Recent data showed that India's economy expanded at its fastest pace in more than two years. The economy grew by 5.7 percent in the April-June quarter from 4.6 percent in the corresponding period last fiscal.
The S&P bank index of the BSE gained 334.79 points, followed by metal index which was higher by 283.32 points, capital goods index rose 221.11 points, healthcare index was up 193.06 points and automobile index increased by 151.07 points.
However, IT index was down 56.36 points, FMCG index plummeted by 39.78 points and TECK index went down by 32.51 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading 57 points or 0.72 percent down at 7,968.85 points.
The major Sensex gainers were: Hindalco Inds, up 5.25 percent at Rs.157.40; Sun Pharma, up 4.30 percent at Rs.807.10; Mahindra and Mahindra, up 3.16 percent at Rs.1,393.65; ONGC, up 3.14 percent at Rs.412.20; and Tata Steel, up 3.10 percent at Rs.474.20.
The losers were: Dr Reddy's Lab, down 2.61 percent at Rs.3,227.25; HDFC, down 1.90 percent at Rs.1,037.75; GAIL, down 1.51 percent at Rs.443.55; Hero MotoCorp, down 1.30 percent at Rs.2,896.20; and ITC, down 1.22 percent at Rs.371.75.
Among the Asian markets, Japan's Nikkei closed 0.88 percent down. China's Shanghai Composite Index was lower by 0.38 percent. However, Hong Kong's Hang Seng gained 0.11 percent.
In Europe, London's FTSE 100 was trading 0.13 percent up. However, Germany's DAX Index was up by 0.08 percent, and the French CAC 40 Index was higher by 0.73 percent at the closing bell here.