The All Share Price Index closed at 2,979.41, up 1.77 percent (51.85 points) while the Milanka Price Index of more liquid stocks closed at 3,395.92, up 2.47 percent (82.00 points).
Turnover was 576 million rupees, according to provisional Colombo Stock Exchange statistics.
"Prices went up almost across-the-board today," said Charith Kamaladasa of Lanka Securities. "Especially blue chips, the banking sector, and fundamentally sound counters gained a lot.
"
Investors would have reacted to the latest corporate quarterly earnings where most companies reported good results, he said.
"Investors have started getting interested again.
The market is showing signs of recovery after a dull, inactive period, and it should bring in more buying in the weeks ahead.
"Turnover levels were not that good throughout the week, so we can’t say activity has picked up but the selling pressure went out and more buyers are showing interest.
"
The presence of a foreign fund manager in town may also have given some hope to investors of more foreign buying in future.
Market heavyweight Dialog Telekom ended at 7.
50 rupees, up 25 cents, and was the most actively traded in terms of volumes with over two million shares changing hands.
The company has reported a September quarter loss but is showing signs of a recovery.
First Capital Holdings (formerly CF Venture Fund) was the day's most actively traded share and highest gainer, closing at 26.25, up four rupees or almost 18 percent.
Piramal Glass Ceylon closed flat at 2.
10 rupees. Colombo Dockyard, which has just reported almost doubling its September quarter profit, closed at 185 rupees, up 10.75.
Foreign investors have been net sellers on Wednesday and Thursday when the market picked up.