The Sensex and Nifty reversed losses in trade today and rose to record highs powered by banking and consumer durables stocks. While the Sensex closed 391 points or 1.05% higher at 37,556, Nifty gained 1.03% or 116 points to close at 11,360.
Indices hit fresh lifetime highs as investors accumulated the recently battered banking, auto and realty counters.
The BSE bankex rose 502 points to 31079 level. The consumer durables goods index rose 320 points to 21,372 level.
Bank Nifty too witnessed huge buying activity with the index closing 1.24% or 339 points higher at 27,695 level.
The 30-share Sensex stayed in the green throughout the session and hit the day's high of 37,582 on a flurry of buying. This is its biggest single-session gain since May 31, when it had surged 416.27 points.
The index had lost 441 points in the previous two sessions after the RBI hiked the policy rate, making loans costlier for consumers, amid an escalation in the Sino-US trade conflict.
Meanwhile, the Nifty surpassed its previous closing high of 11,356 hit on July 31.
Intra-day, it shuttled between 11,368 and 11,294.
This is its biggest single-day jump since June 29, when it had surged 125.20 points.
It was the second straight week of gains for the benchmarks. The Sensex recorded a rise of 219.31 points, or 0.59 per cent, while the Nifty gained 82.45 points, or 0.73 per cent, during the week.
"Good monsoons, GST cuts and strong quarterly earnings will push the markets upwards," said Rahul Sharma, a senior research analyst with Mumbai-based investment advisory firm Equity99.
The BSE midcap and small cap indices rose 149.29 and 193 points respectively.
In comparison, the BSE largecap index rose just 0.91 percent or 39.78 points.
Top Sensex gainers were Axis Bank (5.17%), Vedanta Ltd (3.60%), YES Bank (2.96%), ICICI Bank (2.33%) and Kotak Mahindra Bank (2.20%).
The Jet Airways stock fell 7% to 308 level amid reports which said the airline would be unable to fly beyond 60 days unless cost-cutting measures including pay cuts are put in place, and it has approached investment bankers again to help sell a stake in the carrier.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net of Rs 639.87 crore, while domestic institutional investors (DIIs) also sold equities to the tune Rs 340.30 crore yesterday, provisional data showed.
Stock markets were mostly higher Friday ahead of the release of US jobs data, which is expected to show companies still hiring at a brisk pace in the world's largest economy.
Germany's DAX added 0.4 percent to 12,598 and the CAC 40 in France edged up 0.3 percent to 5,476. Britain's FTSE 100 gained 0.7 percent to 7,627. Dow and S&P 500 futures were flat, auguring a slow start on Wall Street.
Japan's Nikkei 225 added less than 0.1 percent to 22,525.18 and the Shanghai Composite index lost 1.0 percent to 2,740.44. Hong Kong's Hang Seng index gave up 0.2 percent to 27,650.83 and Australia's S&P ASX 200 edged 0.1 percent lower to 6,234.80. South Korea's Kospi added 0.8 percent to 2,287.68.
Written and edited by Aseem Thapliyal