Indian stock markets surged Friday as sentiment was buoyed by the positive news of Greek PSI debt swap.

The benchmark BSE Sensex surged 2.09 percent or 357.72 points to 17,503.24. The 50 share NSE Nifty surged 2.17 percent or 113.10 points to 5,333.55.

The markets opened with a strong positive note on the back of positive cues from Asian markets and Wall Street overnight as Greece has moved closer to avert a default. In the afternoon, markets continued their rally despite mixed European markets.

Greece has announced that it has received sufficient support for its bond swap with 85.8 percent of debt holders subject to Greek law agreeing to the deal. Subsequent to the offer presented by the government for swapping the holdings, the bond holders tendered 152 billion euros of Greek-law bonds.

The agreement needed for pushing the deal through was 75 percent. Though this was the minimum level required, Greece stated that it expected a participation of over 90 percent.

Meanwhile, China inflation eased more sharply than expected in February showing signs that the price pressure is gradually diminishing. Inflation declined to 3.2 percent compared to analysts' estimation of 3.4 percent.

All sectoral indices ended with gains except FMCG. Capital Goods and Bankex sectors surged more than 3.6 percent while Metals sector climbed 4.69 percent. Consumer Durables, Realty, Auto and PSU sectors gained more than 2 percent.

Shares of Multi Commodity Exchange of India (MCX), which debuted at the BSE on Friday, jumped more than 25 percent to Rs 1,297.

ICICI Bank shares climbed 6.22 percent and State Bank of India gained 3.79 percent on hopes that the central bank would further reduce the cash reserve ratio.

Larsen & Toubro Ltd. rallied 5.27 percent after the company appointed K Venkataraman as its CEO and MD.