Sustained buying in the trade on Thursday trade provided cushion to the indices that eventually led to both the Sensex and Nifty wrapping up the session with gains of over 1%. The broader index ended up 122.60 points, or 1.22%, to close at 10166.70 after shuttling between 10182.65 and 10061.90.
Dalal Street saw investors hunting for bargains in recently-battered bank, auto and metal stocks, that came under the weather in the previous session on the back of the central bank's decision to hold repo rates in its sixth bi-monthly monetary policy meeting.
Market breadth was positive with 1,272 advances against 316 declines. Other gainers were Sun Pharma, HUL, Cipla, ONGC, Maruti Suzuki, HDFC Bank, Bharti Airtel, Axis Bank, ICICI Bank, HDFC Ltd and Tata Steel, gaining up to 2.21 per cent.
"On the macro front upcoming RBI policy and Gujarat state election will be an influential factor for investors which is steering the market to consolidate", said Vinod Nair, Head of Research, Geojit Financial Services.
Among sectoral and industry indices, consumer durables jumped by 2.72 percent, FMCG 2.70 percent, oil&gas 2.68 percent, teck 2.61 percent, IT 2.05 percent, auto 1.48 percent, realty 1.36 percent, healthcare 1.21 percent, metal 0.76 percent, bankex 0.75 percent, capital goods 0.74 percent, IPO 0.70 percent and power 0.26 percent.
However, Coal India fell by 2.75 percent, followed by Hero Motoco 2.60 percent, Wipro 2.14 percent, Dr Reddy 2.03 percent, M&M 1.44 percent and TCS 1.12 percent.
Asian markets were trading higher following a broad-based rally in U.S. equities.
Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) sold shares worth Rs 4,161.22 crore during the week, as per Sebi's record including the provisional figure of December 08.
Major Asian indices closed higher. The index posted its biggest weekly gain since early November, climbing 1.27 percent this week.
European shares too were in the positive zone in their early deals, with Frankfurt's DAX rising 1.29 percent and Paris CAC 40 up 0.73 percent.