The Sensex started the week higher at 33,968.02 and hovered between 33,285.68 and 32,565.16 before ending the week at 33,250.30, showing a gain of 417.36, or 1.27 percent. It soon hit the day's high of 32992.45 following all-round buying.
The gauge had rallied 352.03 points Thursday.
Money managers believe that the focus will continue to be on the Gujarat polls in the days to come and is likely to keep the market on edge. The broader Nifty too put up a strong show by notching up gains of close to 1%. This is its biggest single-day jump since May 25, when it had gained 149.20 points.
Bucking the trend, SBI topped the gainers list by rising 1.92%, while Bharti Airtel gained 1.18%.
However, Coal India fell by 2.75 percent, followed by Hero Motoco 2.60 percent, Wipro 2.14 percent, Dr Reddy 2.03 percent, M&M 1.44 percent and TCS 1.12 percent.
Strong US job growth, rebound in wages bolster economy's outlook
Last month, analysts forecast that manufacturing, buoyed by global consumer demand, kept growing, adding an estimated 18,000 jobs. Nonfarm payrolls exceeded consensus predictions last month with broad gains across industries.
Anand James, chief market strategist, Geojit Financial Services, the Reserve Bank of India's neutral stance in the December 6 monetary policy review despite firm inflation expectations, and recent falls rendering stocks attractive, whetted the appetite of buyers.
Most Asian and European markets rallied as investors awaited major economic data from China and the USA amid overnight gains at Wall Street following reports that President Donald Trump is planning to unveil a big-spending public works plan. Provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 675.16 crore while domestic institutional investors bought stocks worth Rs 1,243 crore. All the sectoral indices also ended in the green.
On Thursday, bargain hunting by investors and robust buying in auto, consumer durables and capital goods stocks lifted the benchmark indices.
Major Asian indices closed higher.
Asian markets retreated, with Japan's Nikkei falling 0.37%, Hong Kong's Hang Seng declining 1.01% and Shanghai Composite Index finishing 0.18% lower. London's FTSE was up 0.27%.