The benchmark Sensex rose 106 points today to the highest level in a month after data showed economic growth in the second quarter was better than expected and manufacturing activity expanded last month.
The gains were led by healthcare, capital goods, banking and metal sector stocks.
ICICI Bank, Sun Pharma and Larsen & Toubro helped to lift the index even as ONGC and Hindustan Unilever dragged it lower. Jindal Steel, Wipro and BHEL were among the top gainers.
The 30-share S&P BSE Sensex resumed on a lower note and hovered in a range of 20,770.51 to 20,941 before ending at 20,898.01, up 106.08 points or 0.51 %. It was the third day of gains for the index, which is at the highest level since the November 5 close.
"GDP numbers, which were better than estimates, and improvement in manufacturing data for November boosted market sentiment," said Nidhi Saraswat, Senior Research Analyst at Bonanza Portfolio Ltd.
The 50-share CNX Nifty on the National Stock Exchange surged 41.75 points, or 0.68 %, to 6,217.85. The SX40 on the MCX Stock Exchange ended at 12,375.76, up 31.27 points.
The economy grew 4.8 % in the three months ended September 30 as agriculture and factory output improved, the government said after market hours on Friday. Growth was 4.4 % in the previous quarter.
India's manufacturing sector activity expanded in November for the first time since July, driven by rising new domestic orders, an HSBC survey said today. The HSBC India Manufacturing Purchasing Managers' Index for the manufacturing industry climbed from 49.6 in October to 51.3 in November.
Foreign institutional investors bought shares worth a net Rs 745.16 crore last Friday, according to provisional data from the stock exchanges.