On the currency front, the Indian rupee strengthened by 30 paise to close at 64.04 against the USA dollar from its previous close at 64.34.
Also, the NSE Nifty rose 37.70 points, or 0.36 per cent, to 10,230.65.
Shares of metal, realty, consumer durables, auto, capital goods and banking hogged limelight on a flurry of buying by investors.
On two straight days, the Sensex has gained 410 points and the Nifty over 140 points. The rupee and stocks ignored the WPI inflation which was at a 8-month high of 3.93 per cent.
However, the BSE market breadth was bearish - 1,572 declines and 1,049 advances.
"Markets ended higher on Friday on the back of the outcome of Gujarat and Himachal Pradesh exit polls".
The official results will be known only on December 18, but the exit polls due later in the day will give an indication of whether BJP will retain Gujarat or the newly appointed Congress president Rahul Gandhi will taste victory this time. The central bank kept its policy outlook on additional increases for 2018 and 2019 unchanged.