The wide-based National Stock Exchange's Nifty also rose by 49.45 points to 3,095.20 points. Brokers said a slew of measures announced by the government in its second stimulus package, RBI cutting key rates up to one percentage point late on Friday and eased overseas borrowing mainly buoyed the trading sentiment.

They said a firming global markets also boosted the trading sentiment.

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Banking sector index moved up by 2.85 per cent at 5,838.29 after state-run State Bank of India rose by Rs 31, or 2.33 per cent at Rs 1,361, ICICI bank by Rs 19.45, or 4.13 per cent at Rs 490.65 and HDFC Bank by Rs 16.60, or 1.63 per cent at Rs 1,032.40.

Other gainers were Reliance Industries, Reliance Infra, Rcom, Larsen and Toubro, BHEL, Tata Steel, DLF Ltd, Infosys Technologies, Tata Consultancy Services, Tata Power and Wipro.

Meanwhile, the Dow Jones Industrial Average closed 2.94 per cent higher on Friday, while Hong Kong's Hang Seng index was up 2.40 per cent, while Japan's Nikkei was up over two per cent in early trade today.