Benchmark indices surged in trade, as the rupee recovered and was trading higher by 45 paise at 73.66 to the dollar, when the markets closed. The currency had closed at 74.12 to the dollar on Thursday.
Global cues were also strong with recovery seen in global markets, including those in Asia. Dow Futures were also pointing to a higher opening.
The Sensex ended the day with gains of 732 points at 24,733 points, while the Nifty ended up 238 points in trade. Auto stocks were leading the set of gainers with Mahindra and Mahindra and Maruti among the top gainers. Both these stocks have been hammered in the recent past.
Heavyweights, ITC and Reliance Industries also supported the markets. IT stocks came under some selling pressure, following strength in the rupee. Shares of Tata Motors was up 2 per cent, after moving between gains and losses.
Meanwhile, European markets were trading with gains, with the German DAX, French CAC and the UK's FTSE all higher in trade.