The Bombay Stock Exchange 30-share index gained 194 points to end at more than a six-month high of 11,329.05 in continued volatility on strong cues in European markets.
European markets were higher by more than one per cent in early trade while Asian indices closed with mixed results.
The benchmark Sensex registered gains for the second day in a row and was up 1.74 per cent over its previous close.
Brokers said investors seem to have stepped up their rollover of Nifty positions a day after encouraging fourth-quarter earnings released by some major corporates.
They said the market is expected to remain volatile next week as April contracts of Future & Options will expire on Thursday.
The broader 50-share Nifty of the National Stock Exchange also spurted by 57.05 points or 1.67 per cent to close at 3,480.75 from its last close.
Bank stocks remained in the limelight due mainly to a lower interest rate regime, which is likely to boost the lending growth of the banking industry.
Institutional investors were believed to be heavy buyers in the frontline stocks during the day. As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs 241 crore equity on April 23.
Domestic institutional investors too were net buyers to the tune of about Rs 426 crore.
Mahindra & Mahindra was the day's biggest gainer with a rise of 7.01 per cent.
Other major gainers were Jaiprakash Associates (6.07 per cent), Grasim (5.68 per cent), Bharti Airtel (5.47 per cent), ACC (4.88 per cent), REL Infra (3.72 per cent), Reliance Comm (3.57 per cent), Tata Power (3.38 per cent), SBI (3.33 per cent) and Tata Motors (2.87 per cent).
India's largest private sector company Reliance Industries was up 1.26 per cent after the company announced a 9.35 per cent fall in its net profit in the quarter ended March 2009, which was better than market projections.
The market breadth turned positive as 1,536 counters registered gains against 970 losers on the BSE.
The trading volume improved to Rs 5,278.66 crore from Rs 5,023.93 crore on Thursday. Reliance Industrial Infrastructure clocked the highest turnover of Rs 301.14 crore, followed by RIL (Rs 237.18 crore), Reliance Capital (Rs 216.13 crore), ICICI Bank (Rs 208.05 crore) and HDIL (Rs 206.35 crore).
Among sectoral indices, the Bankex soared another 2.77 per cent while consumer durables and capital goods gained 2.32 per cent and 2.04 per cent, respectively.
