Key benchmark indices closed nearly 1% higher on the last trading day of the week on the back of broad based buying led by autos ahead of the September sales due next week.
The Sensex advanced 183 to close at 18,763 and the Nifty added 54 points to end at 5,703.
The rupee rose to a near five-month high on Friday after the government stuck to its fiscal second half borrowing and said it will not borrow more via bonds in the current year.
The rupee rose to a high of 52.55, a level not seen since May 1.
It was trading at 52.69 in recent trades versus 53.01/02 last close.
Asian shares rose on Friday as Spain's economic reform plan eased worries about euro zone's finances, while the strength in oil prices also lent support.
All Asian indices except for Nikkei was trading with gains.
Shanghai Composite, Hang Seng advanced 1.4% and 0.4% respectively.
Except, Realty index which closed down 0.4% all the sectoral indices on the BSE edged higher.
BSE Auto index jumped nearly 2% along with Consumer Durables, FMCG, Metal, Power and Health Care indices up 1% each.
Tata Group shares lead gains with Tata Motors [ Get Quote ], Tata Steel [ Get Quote ], Tata Power [ Get Quote ] and TCS [ Get Quote ] surging 2-3% each.
The group's holding company Tata Sons invested 220 crore in Infiniti on Wednesday while the news of opening of first store in joint venture with Starbucks also boosted sentiment.
TCS also launched Firebird Plus, a new rapid implementation offering for Oracle Fusion Human Capital Management.
Auto shares were up on hopes that sales growth would pick in October ahead of the festive season. Maruti [ Get Quote ] has gained 2% at 1,353. Mahindra & Mahindra was up 1.6% along with Bajaj Auto [ Get Quote ] gaining 0.7%
The top gainers among the Sensex stocks were Hindalco [ Get Quote ], Cipla, Sun Pharma [ Get Quote ], Tata Power, NTPC, ITC and TCS up 2-3%.
Among the losers were Infosys [ Get Quote ], BHEL, SBI [ Get Quote ] and Gail India [ Get Quote ] down 0.2-0.6%
In other stocks, shares of media and entertainment companies were on a roll with most of the stocks from the sector trading at their 52-week highs on the BSE on expectation of higher subscription revenues due to digitisation.
Zee Entertainment Enterprises [ Get Quote ], Sun TV [ Get Quote ] Network, New Delhi Television [ Get Quote ] (NDTV), TV Today and Zee News [ Get Quote ], up more than 3-6% each were trading at their one-year high market price on the BSE.
Indian Hotels Company [ Get Quote ] has moved higher by over 6% to Rs 67 on reports that the New Delhi Municipal Council (NDMC) has allowed the Tata Group to run Taj Mahal Hotel [ Images ], popularly known as Taj Mansingh for up to another year.
Dalmia Bharat Enterprises has moved higher by 13% to Rs 168 on acquisition of north-based cement company Adhunik Cement for Rs 560 crore.
Tata Global Beverages has surged 8% to Rs 143 on back of heavy volumes on reports that Tata Starbucks, the 50:50 joint venture between the company and Starbucks Coffee Company will open their first store in India by the end of next month.
Vakrangee Softwares [ Get Quote ] soared 8% to Rs 59.85, extending its over 3% gain, after the company said its promoters have increased their stake by almost 5% through an open market transaction.
Kingfisher Airlines [ Images ] was locked in lower circuit of 5% at Rs 16.12 on reports that the State Bank of [ Get Quote ] India-led lenders consortium has turned down the company's Rs 200 crore working loan request.
BSE market breadth was positive. Out of 3,043shares traded, 1,644 stocks advanced while 1,248 stocks declined in trades.