The surge in the market sentiments is aided by expectations of another stimulus package from the government. The 30-stock BSE Sensex rose over 1,000 points.
Sensex was trading at 31,648.99, higher by 1,046.38 points or 3.42 per cent from the previous close 30,602.61.
It had opened at 31,656.68, and has touched an intra-day high of 31,711.70 and a low of 31,512.11.
Even the rally in Asian indices supported the surge in Indian markets. The Nifty50 on the National Stock Exchange (NSE) was trading at 9,283.80, higher by 291 points or 3.24 per cent from previous close.
Banks and financials pushed the markets with IndusInd Bank (up 6 per cent), HDFC, Axis Bank, and Bajaj Finance (all up 5 per cent) being the top gainers. IT major Tata Consultancy Services also rose 4 per cent after the company announced its March quarter results.
The stocks in the Nifty were also in the green boosted by Nifty Bank index, up over 4 per cent.
Meanwhile, Rupee opened higher at 76.56 per dollar against Thursday's close of 76.86 per dollar. While gold continued to rally aided by fears of a recession and expectations of stimulus measured from central banks continue.
On Thursday, US stocks jumped as data estimated more than 5 million Americans filed for unemployment benefits last week.
The Dow Jones Industrial Average climbed 33.33 points, or 0.14 per cent, to 23,537.68. The S&P 500 was up 16.19 points, or 0.58 per cent, to 2,799.55. The Nasdaq Composite Index jumped 139.19 points, or 1.66 per cent, to 8,532.36.
Six of the 11 primary S&P 500 sectors finished higher, with health care up 2 per cent ended as top gainers. Energy stocks declined 3.97 per cent.
The number of initial jobless claims in the US touched 5.25 million in the week ending April 11, as Covid-19 impact continues to hamper the job prospects, following staggering figures of over 6 million in the previous two weeks, the US Bureau of Labor Statistics reported.
(With inputs from IANS)