The 30-share Sensex ended at 19,683 up 270 points or 1.39% and the 50-share Nifty ended at 5,946 up by 82 points or 1.41%.
The Sensex and the Nifty reached an intra-day high of 19,706 levels and 5,953 mark, respectively.
World shares hit their highest level since June 2008 and the dollar touched a fresh 3-1/2-year high against the yen on Friday, ahead of US jobs data expected to point to a continuing pick up in the world's biggest economy.
China also gave markets a boost as official data showed February exports grew 21.8 percent versus a year ago, more than double the expected rise.
European shares, which have rebounded strongly this week after last week's Italian election and US spending cuts-related wobble, opened up 0.5 per cent.
That put them on track for their biggest gains since the opening week of the year.
Back home, BSE Oil & Gas, FMCG, Metal, Banks and Capital Goods indices spurted by almost 2% followed by counters like PSU, Power, Consumer Durable and Healthcare, all gaining by 1% each. However, BSE IT index declined by nearly 1%.
The Oil & Gas Index on the BSE was the top gainer on Friday led by gains in public sector oil marketing companies on the back of declining crude oil prices in the international markets.
Index heavyweight Reliance Inds surged by nearly 2% on shortcovering. ONGC also gained by nearly 2%.
Bank shares were up on hopes of a rate cut by RBI in the Credit Policy meet on March 18. HDFC Bank, ICICI Bank and SBI surged by 2% each.
Housing Development Finance Corporation (HDFC) surged over 4% was in focus on the bourses on hopes of higher growth.
“According to the National Housing Bank - the regulator for home financiers -- the housing finance industry is expected to grow by 18% in the current financial year,”
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