After soaring 640.32 points during the day, the 30-share index settled 523.68 points, or 1.53 per cent, higher at 34,731.73.
Similarly, the broader NSE Nifty surged 152.75 points, or 1.51 per cent, to 10,244.40.
Bajaj Finance was the top gainer in the pack, soaring around 7 per cent, followed by Reliance Industries (RIL) which ended over 6 per cent higher.
RIL spurted to its record high of Rs 1,788.60 during the day after Mukesh Ambani said his flagship firm is now net-debt free after a record Rs 1.69 lakh crore fundraising in under two months. The stock ended at Rs 1,759.50.
On the other hand, IndusInd Bank, HCL Tech, ITC, M&M and HDFC were among the laggards.
According to analysts, besides stock-specific action, rally in global markets and fresh foreign fund inflows buoyed market sentiment.
"It has been good week for the global markets as positive sentiment on reopening the economies overshadowed reports of fresh COVID-19 cases in the US and China," said Sanjeev Zarbade, VP PCG Research, Kotak Securities.
Market mood was supported by a gradual resumption in business activities and an earlier-than-expected normalisation in certain consumption sectors, he noted.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a firm note.
Stock exchanges in Europe were trading significantly higher in early deals.
International oil benchmark Brent crude futures climbed 2.51 per cent to USD 42.55 per barrel.
On the currency front, the rupee settled 6 paise lower at 76.20 against the US dollar.
Meanwhile, foreign institutional investors bought equities worth a net of Rs 366.57 crore on Thursday, provisional exchange data showed. ANS ABM ABM