Asian markets were also trading in the green as weaker-than-expected USA wage growth helped calm investor fears about rising interest rates and inflation.
At 3.30 p.m., the broader Nifty50 of the National Stock Exchange (NSE) provisionally closed at 10,715.50 points - up 97.25 points or 0.92 per cent - from its previous close of 10,618.25.
Huge gains in financials, metals, auto as well as energy names ensured that the market had a good start to the week with the Nifty reclaiming 10,700 during the day's trade and Sensex ending nearly 300 points higher.
In the early trade, the Sensex opened higher at 34,983.59 and hovered around 35,259.81 to 34,977.74 before ending at 35,208.14, up 292.76 points or 0.84 per cent.
Sectoral indices led by banking, tech, realty and consumer durables were trading in green with gains over 1.5 percent.
The surge in Street came on back of bank stocks as the Nifty PSU Bank sub-index gained in excess of 2 per cent.
Meanwhile, domestic institutional investors bought shares worth a net Rs 1,084.09 crore, while foreign portfolio investors sold shares worth Rs 1,628.23 crore on Friday, provisional data showed. Analysts said crude oil prices and the rupee would be the other key factors affecting markets.
In the Asian region, Hong Kong's Hang Seng was up 0.52% and Shanghai Composite Index rose 1.06%, while Japan's Nikkei shed 0.45% in early trade. The US Dow Jones Industrial Average ended 1.39 per cent higher in Friday's trade.