Extending gains for the third straight day, the Bombay Stock Exchange benchmark Sensex on Friday rose by 196 points on sustained buying by funds, which took cues from firming overseas markets.
The 30-share index advanced by 196.66 points to close at 16,863.06 points. The barometer had gained over 645 points in last two trading sessions.
Similarly, the wide-based National Stock Exchange index Nifty rose by 63.45 points to 5,066.55 points.
Among the 30 index scrips, 26 closed with gains.
Strong earnings by Tata Motors also had a positive impact, triggering buying in auto sector stocks.
The rally was led by realty and metal stocks on rising commodity prices, supported by reports that China reassured its commitment to investing in Europe.
Among Asian markets, Hong Kong index Heng Seng rose by 1.73 per cent, Japan's Nikkei by 1.28 per cent, Singapore's Straight Times by 1.62 per cent and Vietnam's index by 3.19 per cent.
Higher opening in European stock markets this afternoon further bolstered the market.