Benchmark stock index Sensex rallied nearly 450 points while broader Nifty closed above the 26,000 level on Friday following buying in metal shares and positive global trends.
Rising for the second day, the 30-share BSE Sensex climbed 449.53 points or 0.53 per cent to settle at 85,267.66.
During the day, it jumped 502.69 points or 0.59 per cent to 85,320.82.
Rebounding from the month's low level, the 50-share NSE Nifty surged 148.40 points or 0.57 per cent to settle at 26,046.95.
Among Sensex firms, Tata Steel, Eternal, UltraTech Cement, Larsen & Toubro, Maruti and Bharti Airtel were the major gainers.
However, Hindustan Unilever, Sun Pharma, ITC and Asian Paints were among the laggards.
"Global risk appetite improved after the US Fed rate cut, boosting liquidity optimism and lifting domestic equities despite the rupee hitting record lows and continued FII outflows.
"Broader indices are showing buying interest, bouncing back post recent consolidation," Vinod Nair, Head of Research, Geojit Investments Limited, said.
The BSE midcap gauge jumped 1.14 per cent and smallcap index climbed 0.65 per cent.
Among sectoral indices, metal surged 2.58 per cent, commodities (1.84 per cent), realty (1.47 per cent), services (1.34 per cent), telecommunication (1.27 per cent), oil & gas (1.21 per cent) and industrials (1 per cent).
BSE FMCG emerged as the only laggard.
A total of 2,593 stocks advanced while 1,593 declined and 170 remained unchanged on the BSE.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled in positive territory.
Brent crude, the global oil benchmark, dipped 0.05 per cent to $61.25 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,020.94 crore on Thursday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 3,796.07 crore, according to exchange data.