Snapping its four-session losing streak, the 30-share index gained 76.98 points, or 0.37 per cent, to 20,760.50. The index had lost nearly 211 points in the previous four sessions.
Similarly, the wide-based National Stock Exchange index Nifty moved up by 18.20 points, or 0.30 per cent, to 6,163.10.
Brokers said fresh positions created by funds and retailers ahead of the RBI's second quarter review of monetary policy tomorrow and a firming trend in the Asian region helped trading sentiments to improve.
Besides, encouraging earnings by some companies too had a positive impact, they said.
Hindustan Unilever Ltd gains 1.6 per cent after earlier rising as much as 4.2 per cent after the company's sales volumes in the July-September quarter grew 5 per cent, in line with market estimates of 4-5 per cent growth.
Maruti Suzuki India Ltd gains 0.75 per cent ahead of its earnings later in the day.
Foreign investors have continued to buy local shares, remaining net buyers for a 16th consecutive session. Provisional exchange data showed a net purchase of 6.27 billion rupees ($101.79 million) worth of shares on Friday. However, traders expect volatility after shares rise to near three-year highs as RBI Governor Raghuram Rajan is expected to raise interest rates by 25 basis points at its policy review on October 29, while US Federal Reserve holds its policy meeting on October 29-30.
Meanwhile in other Asian markets, Hong Kong's Hang Seng index rose 0.42 per cent, while Japan's Nikkei was up 1.08 per cent in the early trade.
The US Dow Jones Industrial Average ended 0.39 per cent higher in Friday's trade.