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Benchmark indices have extended the gains led by financials and index heavyweight RIL along with Asian shares leading the gains.
The markets have also gained on speculation that the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014.
Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
By 10:15, the Sensex was higher by 228 points at 20,643 mark and the Nifty gained by 68 points at 6,114 levels.
According to Somil Mehta, Sr Technical Analyst (Equity) from Sharekhan, “Short term and medium outlook remains positive Key support would be around 6000/5940 and target would be 6230/635. Today nifty is expected to close above 6100”.
On the global front, Asian shares rose to a five-month high on Friday as investors took heart from quickening growth in China a day after the United States sealed an 11th hour deal to break a confidence-sapping government shutdown.
The U.S. debt drama has also heightened speculation of the Federal Reserve delaying the start of its stimulus reduction plan, underpinning riskier assets but keeping the dollar pinned down to an eight-month low.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5 percent to a five-month high, adding to a 0.6 percent rise in the previous session.
China's economy grew 7.8 percent in the third quarter, its fastest pace this year and in line with expectations, as firmer foreign and domestic demand lifted factory production and retail sales.
Back home, the rupee is trading at 61.12/13 against the dollar versus its close of 61.23/24 on Thursday, tracking a continued sell-off in the greenback across all major currencies on worries of the economic impact from the weeks-long U.S. government shutdown.
On the sectoral front, BSE Bankex has surged over 2% followed by counters like Oil & Gas, Realty, PSU, Consumer Durables, Metal, Healthcare, Power, Auto and Capital Goods, all gaining by 1% each. Infact, all the major BSE sectoral indices are trading in green zone.
Banking shares are in limelight on the bourses with most of the frontline stocks trading higher by up to 3%, after the rupee appreciated in early trades against the dollar on the back of positive sentiments in the market.
ICICI Bank, HDFC Bank, HDFC and SBI have gained between 2-3%. HDFC Bank's net profit rose 27.07% to Rs 1982.32 crore on 17.65% rise in total income to Rs 11937.69 crore in Q2 September 2013 over Q2 September 2012.
Index heavyweight RIL has gained by nearly 2%.
L&T, the infrastructure major, declined by 1% on opening on Friday morning ahead of its results. Analysts said that the September-quarter earnings numbers may disappoint due to pricing pressures.
The stock fell 1.1% to Rs 828 post the opening but recovered from the decline immediately. The share is currently up 0.9% to Rs 845.
Other notable gainers are Sesa Sterlite, M&M, Tata Power, Wipro and Dr Reddy’s.
Among other shares, SpiceJet has surged over 5% to Rs 21.75 in early morning deals on back of heavy volumes on reports that Qatar Airways is in talks with the company to buy minority stake in Indian low cost airline.
The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have gained by nearly 1% each.
The market breadth in BSE remains positive with 977 shares advancing and 282 shares declining.
