The strong performance of the domestic stock market came amid sustained foreign fund inflows and easing crude oil prices, boosting investor sentiment during the festive trading period.
The 30-share BSE Sensex rallied 1,718.01 points, or 2.17 per cent, to settle at 81,028.02, delivering significant gains to investors on Dhanteras despite weakness in global markets.
The 50-share NSE Nifty climbed 493.75 points, or 2.01 per cent, to reach an intraday high of 25,030.35.
ICICI Bank, HDFC Bank, Titan, Axis Bank and Kotak Mahindra Bank emerged as the major gainers among the leading stocks.
Power Grid Corporation was the only laggard in the blue-chip pack.
Meanwhile, global stock markets witnessed a major sell-off, with trillions of dollars wiped off the market value of leading technology companies amid growing concerns over artificial intelligence (AI) development following a shift in the US political landscape after the midterm elections.
Shares of companies across the AI and technology sectors plunged after the Democrats delivered a strong electoral performance, with their campaign focusing on slowing the development of artificial intelligence.
The tech-heavy Nasdaq Composite Index closed more than 5.5 per cent lower, wiping out an estimated $2.5 trillion (£1.9 trillion) in market value, according to Dow Jones data, BBC reported.
With other US stocks also declining, the sell-off marked one of the worst trading days for the market since 2025.
A similar trend was witnessed across Asian markets on Friday, with shares of companies manufacturing computer chips and other equipment essential to AI development suffering sharp losses.
Japan's Nikkei 225 plunged 6 per cent in early trading, while memory chipmaker Kioxia lost more than 12.6 per cent and rival Tokyo Electron slipped 9.5 per cent, BBC reported.