The BSE barometer Sensex halted a two-day losing spell and rose by 473.45 points to 24,435.66, its biggest single-day gain since October 5, tracking a relief rally in global shares on hopes of a fresh stimulus from the euro zone and recovery in crude oil.
Consequently, the market capitalisation of BSE-listed companies moved up Rs 1,73,007 crore to Rs 92,03,826 crore.
"Market witnessed a relief rally in expectation of an additional stimulus from ECB by March... Chinese data are pointing to stabilisation in the economy," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial.
The 50-share NSE Nifty settled 145.65 points, or 2 per cent, higher at 7,422.45.
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"The markets ended the week with sharp gains on Friday, buoyed by the global markets, which traded higher. The weakness in Chinese economy and the falling crude prices have taken a toll on markets across the globe, in the past couple of weeks," said Dipen Shah, Senior Vice-President and Head of Private Client Group Research, Kotak Securities.
Among the 30-Sensex components, 26 ended higher led by GAIL, Maruti, Tata Steel and State Bank of India.
Among BSE sectoral indices, metal rose 4.32 per cent, followed by auto 3.65 per cent, oil and gas (2.95 per cent), bankex (2.81 per cent), capital goods (2.66 per cent), utilities (2.76 per cent), industrials (2.49 per cent) and finance (2.48 per cent).
On BSE, 2,066 stocks advanced while 607 declined while 148 stocks remained unchanged.