There were widespread gains, with oil and gas stocks in the lead, amid a firming trend in the global market.
Oil took back some of the lost ground in Asia today after a steep fall in the previous session, with US crude back above USD 30 a barrel, as traders weighed the impact of a potential freeze by key producers.
All eyes are now on the upcoming rail budget (Thursday), the economic survey (Friday), and the Union Budget, which is due to be presented on February 29.
There are expectations among investors that the Budget session, which starts on Tuesday, will yield some positive results amid worries over the fate of the long-delayed goods and services tax (GST) Bill.
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Trading stayed in the positive zone for the better part of the day. The Sensex ended higher by 79.64 points, 0.34 per cent, at over a two-week high of 23,788.79.
At the close, the NSE Nifty was up 23.80 points, or 0.33 per cent, at 7,234.55.
"Markets started the expiry week on a positive note led by strong global markets. Hopes of reform measures in the Budget session (helped)... Upsurge in commodity prices too lifted sentiment," said Gaurav Jain, Director, Hem Securities.
Investors were more sure-footed after a Shanghai-led rally on Asian bourses following reports that China has replaced the head of its securities regulator.
A total of 18 stocks rose out of the 30 in the Sensex pack.
Other major gainers were Sun Pharma, Asian Paints, Lupin, Cipla, ONGC, Dr Reddy's, Bajaj Auto, Axis Bank, Bharti Airtel, Tata Steel, M&M, Coal India, Tata Motors, HDFC Bank, TCS and SBI, rising up by up to 2.16 per cent.
Maruti, the country's biggest carmaker, dropped 1.61 per cent after it suspended operations at its two plants in Gurgaon and Manesar due to Jat agitation over job quota.
Others that lost were NTPC, ITC, Adani Ports, GAIL, Wipro, BHEL, Hero MotoCorp, Infosys and TCS.
Broader markets too kept their head above water, with the mid-cap index rising 0.75 per cent and small-cap gaining 0.46 per cent.
Meanwhile, foreign investors net sold shares worth Rs 191.73 crore on Friday, showed provisional data.
"A rise in oil prices and signs of stabilisation in global
market is providing a relief rally to the Indian market. The upcoming economic survey and Union Budget will portray the market direction further," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd.
Trading in US index futures pointed to a higher opening of the Dow Jones Industrial Average.
The market breadth remained positive as 1,390 shares advanced, 1,158 lost while 153 ruled steady.
The total turnover moved up to Rs 1,928.99 crore, from Rs 1,907.05 crore last Friday.
"Overall, in the near term, we believe the markets would continue to remain weak in upcoming trading sessions and remain between 7,100-7,500 talking about medium term for the Nifty," said Achin Goel, Head, Wealth Management & Financial Planning, Bonanza Portfolio Ltd.