Key equity index Nifty hit its lifetime high while Sensex jumped 493 points to close at an 11-week high driven by favourable macroeconomic data and continuous foreign fund inflows.
The 30-share BSE Sensex jumped 492.75 points or 0.74 per cent to settle at 67,481.19, the highest closing level since September 18.
During the day, it surged 575.89 points or 0.85 per cent to 67,564.33.
The Nifty climbed 134.75 points or 0.67 per cent to settle at an all-time high of 20,267.90.
During the day, the benchmark touched its intra-day record high of 20,291.55, up 158.4 points or 0.78 per cent.
Among the Sensex firms, ITC, NTPC, Axis Bank, Larsen & Toubro, Bajaj Finance, Asian Paints and Tata Steel were the major gainers.
Mahindra & Mahindra, Wipro, Maruti, IndusInd Bank, Kotak Mahindra Bank and HDFC Bank were among the laggards.
Foreign Institutional Investors (FIIs) bought equities worth Rs 8,147.85 crore on Thursday, according to exchange data.
India retained the tag of the world's fastest-growing major economy, with its GDP expanding by a faster-than-expected rate of 7.6 per cent in the September quarter on booster shots from government spending and manufacturing.
In Asian markets, Shanghai settled in the green, while Seoul, Tokyo and Hong Kong ended lower.
India's manufacturing sector continued with its robust performance in November, mainly on the back of substantial easing in price pressures and strengthening demand from clients, according to a monthly survey on Friday.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 56 last month from the eight-month low level of 55.5 recorded in October.
Global oil benchmark Brent crude declined 0.57 per cent to $80.40 a barrel.
Most exit polls on Thursday put the BJP ahead in Madhya Pradesh and gave it an edge in Rajasthan while predicting that it was an advantage for Congress in Telangana and Chhattisgarh.
"Better-than-estimated India GDP numbers will raise the growth outlook for FY24 and provide cheer for the market to continue its upward momentum.
"The global market too rallied on hopes that the ECB has completed its rate-hiking cycle on the back of easing inflation and ahead of the FED chair speech today.
"The auto sales numbers witnessed a festival cheer, while the premium valuation restricted the upside potential," said Vinod Nair, head of research, Geojit Financial Services.
