The markets discounted the inflation concerns with the benchmark Sensex ending the day firm with gain of over 310 points amid strong global cues.
The 30-share index of the Bombay Stock Exchange settled the day at 17,600.12, a rise of 312.81 points, or 1.81 per cent, over its previous close.
The broader 50-share S&P CNX Nifty of the National Stock Exchange also shot up by 62.30 points, or 1.21 per cent, to close at 5,228.20 points.
Marketmen said the bourses rallied taking cues from sharp surges in global exchanges. While the Asian indices ended higher by 0.5-5.0 per cent, European markets traded up by over one per cent in early trade on strong gains in American stocks yesterday.
They said investor sentiments turned optimistic after global scene changed for better after US economy began showing signs of resilience with easing crude oil prices and better- than-expected US manufacturing data.
The US Federal Reserve's decision on Wednesday to cut interest rate by a quarter percentage point, also impacted the markets, which were closed on Thursday.
Inflation pressure and consequent hikes in Cash Reserve Ratio it seems had had little effect on bank shares which stole the limelight today. Key bank stocks SBI, ICICI Bank and HDFC Bank attracted good buying support. While ICICI Bank was up 6.38 per cent, SBI closed higher by 2.58 per cent followed by HDFC Bank at 1.59 per cent.