The Reserve Bank of India's moves to prop up the rupee saw market-men short covering their positions to take the Nifty and the Sensex up in excess of 1.1 per cent.
The Nifty closed at 5472, up 63 points and the Sensex closed at 18,620, up 219 points.
Dipen Shah, Head-PCG Research, Kotak Securities, said “The market is awaiting the GDP data for June ending quarter. Key indicators to watch out for in the next week would be Crude prices and developments on Syria.”
All broader indices (mid cap and small cap) closed in the green while among sectoral indices, auto, realty, metals and commodities closed in the red.
Volatility was down 5.44 per cent and the volatility index India Vix closed at 27.81.
Bajaj Auto, Cipla, TCS, HDFC and HUL were the top five Nifty gainers while Jindal Steel, Grasim, Ranbaxy, Tata Steel and Hindalco were the top losers.
Military action against Syria
The US Government will wait until the UN inspectors come back on Saturday after the investigation is completed.
On Thursday, UK Parliament rejected the Government participation in any military action against Syria, while China said there should be no hurry to force UNSC action against Syria until the investigation is completed.
Dollar remained steady around a three-week high against a basket of currencies after upbeat US growth data.
The US data released on Thursday showed that the country's economy grew at a quicker-than-expected annual pace of 2.5 per cent in the second quarter.
Combined with a fall in weekly jobless claims, this growth reinforced hopes that the US Federal Reserve will start scaling back its $85-billion-a-month bond-buying programme as early as next month.
Japan’s industrial production rose a seasonally adjusted 3.2 per cent in July against the previous month, indicating revival in the country's economy.