The Sensex rebounded over 145 points while the broader NSE Nifty settled above the 11,000-mark today, led by a spurt in IT and pharma counters.
Investors looked beyond the no-confidence motion against the government in the Lok Sabha and accumulated fresh positions, brokers said.
A recovery in the rupee from its record low also supported the bounce back, they added.
While the Sensex rose 145 points or 0.40 per cent at 36,496, Nifty gained 53 points to close at 11,010 level.
Top Sensex gainers were Sun Pharma, Infosys and Reliance Industries.
Bajaj Auto was the top Sensex loser after the firm reported Q1 earnings which fell below estimates.
Market breadth was negative with 1135 stocks closing higher compared with 1437 ending in the red on BSE.
The broader markets staged a mild recovery, with the BSE mid-cap index rising 0.73 per cent and the small-cap gauge ending 0.41 per cent higher.
However, the benchmarks logged their first weekly loss in three weeks. The Sensex fell by 45 points or 0.12 per cent, while the Nifty lost 8.70 points, or 0.08 per cent, during the period.
Meanwhile, domestic institutional investors bought shares worth a net of Rs 470 crore on Thursday, while foreign portfolio investors sold equities to the tune of Rs 315 crore, as per stock exchanges' data.