The 30-share Sensex concluded at 28,343.01, showing a gain of 440.35, or 1.58 per cent over its last close.
The NSE 50-share Nifty was also trading higher by 66.90 points, or 0.78 per cent, at 8,674.35.
Fresh foreign fund inflows supported the rupee but strength in the dollar against some currencies overseas capped the gains, dealers said.
The NSE Nifty climbed 51.25 points, or 0.59 per cent, to 8,658.70.
The NSE Nifty gained 34.90 points, or 0.41 per cent, to 8,607.45 after shuttling between 8,543.75 and 8,622.
The dollar was firm against some global currencies after the US Federal Reserve Chair Janet Yellen indicated that the interest rates could rise in coming months.
Rising business costs have been cited by some economists as one of the reasons behind a sharp slowdown in private investment in China
The Nikkei share average soared 2.2 percent to 16,721.23 in midmorning trade, after rising as high as 16,737.95, the highest since August 17.
On a weekly basis, the Sensex fell 294.75 points or 1.04 per cent and the NSE Nifty slipped 94.35 points or 1.08 per cent. Both the indexes posted second straight weekly losses.
The benchmark BSE Sensex rose 84.81 points, or 0.30 per cent, to 27,920.72, in early session today.
The stock has lost close to 47 per cent in the last four days. The textile firm’s market capitalisation has been reduced to Rs 5,466 crore from Rs 10,334 crore on August 19, a decline of Rs 4,868 crore.
Mid-afternoon trade saw the market wobbled as jittery investors bridled by caution ahead of US Federal Reserve Chair Yellen's speech tomorrow, while lower European opening and lack of direction led the index succumb to selling pressure.
Forex dealers said foreign fund inflows and a higher opening in the domestic equity market also supported the domestic unit.
The NSE Nifty rose 25.60 points, or 0.29 per cent, to 8,675.90 in early trade.
The NSE Nifty ended at 8,650.30, showing a gain of 17.70 points or 0.21 per cent, after hovering between 8,661.05 and 8,620.90.
Benchmark BSE Sensex rose by 118.18 points or 0.42 per cent to 28,108.39 in early trade today.
The exchange has been facing intense pressure from its shareholders to go public and had formed a listing committee to expedite the process and seek support for self-listing.
Rising for the second straight session, the BSE 30-share barometer advanced by 118.18 points, or 0.42 per cent, to 28,108.39
The benchmark BSE Sensex was trading lower by 45.55 points or 0.16 per cent at 27,939.99 in early trade today.
This is the first initial share sale by any private bank in a decade.
Sensex touched the day's high of 28,143.28 following selective buying by participants in bluechip stocks amid sustained foreign fund inflows.
The dollar firmed up against some global currencies on US interest rate hike hopes this year after the Federal Reserve Vice Chairman Stanley Fischer said country's economy was picking up.
"It signals a seamless continuity in the policies pursued by the RBI to conduct its monetary policy in an independent manner," the experts said.
Market participants remained pessimistic as the Reserve Bank of India is unlikely to cut interest rates in the immediate term, given the fact that inflation - both consumer and wholesale - shot up in July.
In a circular, BSE said it would shift the scrips to the Z group, wherein their scrips would be settled on trade-for-trade basis.
Markets turned cautious after a Federal Reserve policy maker said the US economy is strong enough to warrant an increase in interest rates soon.
The rupee had lost 5 paise to end at 66.81 per dollar on Thursday.
The new real estate law will contribute in a large measure to transparency, complete disclosures and clarity to buyers of real estate products.
Brokers said the likely delay in US rate hike is positive for emerging markets, especially India, triggering fresh round of purchases by retail and institutional investors.
Dealers attributed the rupee's fall to increased demand for the US currency from importers and banks.
Gold demand remained extremely poor in the first half of the current year. Market had entered into deep discount zone
The wholesale inflation soared to a 23-month high of 3.55 per cent in July, making investors trim their positions.
The 50-issue Nifty fell 29.60 points or 0.34 per cent to close at 8,642.55. Intra-day, it hovered between 8,682.35 and 8,600.45.
Government's efforts to keep the reform agenda "chugging" will also provide much-needed boost to the economy's medium-term growth.
The 30-share barometer fell 61.55 points or 0.21 per cent to 28,090.85 with IT, teck, consumer durables, capital goods, auto and healthcare trading in the red, falling up to 0.95 per cent.
Traders said the price falls were the result of cashing in following more than two weeks of rallying prices.