Earnings optimism among investors grew, too.
The 30-share BSE index firmed up to an all-time intra-day high of 33,733.71 on a flurry of buying before closing at a record 33,685.56, up 112.34 points, or 0.33 per cent. The previous closing record was 33,600.27 hit on November 1. On Thursday, the barometer had fallen 27.05 points.
The 50-share Nifty touched a fresh high of 10,461.70 during the day and settled up 28.70 points, or 0.28 per cent, at 10,452.50, a new peak, surpassing its previous record of 10,440.50 on November 1.
For the second straight week, the Sensex rose, notching up a significant gain of 528.34 points, or 1.59 per cent. The Nifty was up 129.45 points, or 1.25 per cent, during the week.
Interest rate-sensitive financial and realty stocks stood out.
Punjab National Bank rose 5.07 per cent after the state-owned lender on Friday reported a modest rise in quarterly net profit.
Largest public lender SBI was the leader of the Sensex gainers' pack, rising 3.19 per cent to close at Rs 325, followed by Tata Motors 2.78 per cent. L&T, Axis Bank, ONGC and Cipla too chipped in.
PowerGrid, Sun Pharma, Coal India, Hero MotoCorp and Lupin, however, ended in the red.
According to provisional data released by the stock exchanges, foreign portfolio investors (FPIs) bought shares worth a net Rs 1,032.88 crore while domestic institutional investors (DIIs) sold shares to the tune of Rs 456.51 crore on Thursday.
BSE capital goods index hit a home run, up 1.09 per cent, followed by banking, PSU and realty.
While the small-cap index added 0.49 per cent, mid-cap dropped 0.07 per cent.
Asian shares logged a mixed trend and Europe had a positive opening. Japanese financial markets were closed on Friday for a public holiday.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)