The BSE benchmark Sensex on Friday jumped over 100 points ahead of the budget presentation by interim Finance Minister Piyush Goyal amid heavy buying by foreign portfolio investors. The 30-share index was trading 119.01 points, or 0.33 per cent, higher at 36,375.70.
Similarly, the 50-share NSE Nifty rose 34.15, or 0.32 per cent, to 10,865.10.
On Thursday, the 30-share Sensex rallied 665.44 points, or 1.87 per cent, to close at 36,256.69; and the broader Nifty soared 179.15 points, or 1.68 per cent, to 10,830.95.
At the same time, the rupee on Friday depreciated by 9 paise to 71.17 in early trade on the forex market amid strengthening of the American currency and caution ahead of interim budget.
Forex traders said strengthening of the US dollar against some currencies overseas, focus on interim budget and rising crude oil prices weighed on the local unit.
The NDA government is set to present its last budget on Friday, which is expected to have major announcements to support the farm sector and spur consumption.
At the Interbank Foreign Exchange, the rupee opened at 71.08, then fell further to 71.17 against the US dollar, showing a decline of 9 paise over its previous closing.
On Thursday, the rupee had settled 4 paise higher at 71.08 against the US dollar.
Top gainers in the Sensex pack include Hero MotoCorp, HCL Tech, Bharti Airtel, Bajaj Finance, Infosys, HDFC, HUL, M&M, L&T, ITC and Maruti, rising up to 2.91 per cent.
Vedanta was the biggest loser on Sensex, cracking over 18 per cent after the metals and mining giant on Thursday reported a 25.54 per cent decline in consolidated net profit at Rs 1,574 crore for the December 2018 quarter, on the back of higher expenses and drop in commodity prices.
Other losers include PowerGrid, ONGC, Axis Bank, Kotak Bank and Sun Pharma, shedding up to 1.14 per cent.
According to Hemang Jani, Head - Advisory at Sharekhan by BNP Paribas, the government might look to boost the rural and agri sector ahead of the general election.
"Expect the government to go in for a populist Budget; however, market participants will closely weigh in the risk of a higher fiscal deficit and its impact on the market," he said.
It is classic macroeconomic theory to expect the government to come forward with fiscal stimulus during times of economic weakness, said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
A looming election and aggressive opposition only adds to the pressure to deliver a meaningful relief package, he said; adding that, should the Budget disappoint, investors' attention is likely to revert to concerns centered around slowing growth and elections.
Meanwhile, on a net basis, foreign portfolio investors (FPIs) bought shares worth a net of Rs 3,006.41 crore Thursday, and domestic institutional investors (DIIs) were net sellers to the tune of Rs 1,634.32 crore, provisional data available with BSE showed.
Domestic market, however, will continue to be volatile ahead of the interim budget which will be announced on Friday, traders said.
Elsewhere in Asia, Shanghai Composite Index jumped 0.77 per cent, Kospi gained 0.22 per cent, and Japan's Nikkei was up 0.24 per cent; while, Hong Kong's Hang Seng slipped 0.21 per cent in early trade.
On Wall Street, Dow Jones Industrial Average marginally lower at 24,999.67 on Thursday.
