The US markets surged on Friday, with the Dow extending its longest weekly winning streak of 2012, as better-than-forecast jobs data erased a four-day drop. The Labor Department stated that non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June. This is the fastest pace of job growth since February. Though, the non-farm payrolls rose more than estimated in July but not enough to prevent the increase in the unemployment rate to a five-month high, unemployment rate advanced to 8.3% in July from 8.2% in June. The latest job report suggested a mixed picture as employers add more jobs and government continued to trim payrolls but the economy remains weak and most of the new job additions are on the low end of the pay scale. There was other good news, the Institute for Supply Management's index of US non-manufacturing activity rose to 52.6 in July from 52.1 in June, with any number above 50 indicating expansion. According to data released, US services activity slightly accelerated in July, with a gain in business activity while employment contracted.

In Europe, speculation that Spain might soon make a formal rescue request weighing sentiment, with Spanish borrowing costs falling to levels viewed as more sustainable. Spanish Prime Minister Mariano Rajoy repeated that the country was finding it more difficult to refinance its debt, but also stated that he hasn't decided whether to call for Europe's help. In economic news, euro zone retail sales rose unexpectedly in June and the UK recorded the slowest growth in its service sector in 19 months in July. Euro zone retail sales rose 0.1% on a monthly basis in June, following a 0.8% increase in May. In the wider region of EU27, retail sales declined 0.3% on a monthly basis and fell 0.7% from the prior year in June. Besides, the euro zone economy remained in a downturn at the start of the third quarter, according to Markit Economics. The final composite output index rose to 46.5 from 46.4 in June. Separately, the UK service sector recorded the slowest growth in nineteen months in July. The seasonally adjusted purchasing managers' index for the UK service sector dropped to 51 in July from 51.3 in June.

The Dow Jones industrial average gained 217.29 points, or 1.69 percent, to 13,096.20. The S&P 500 Index gained 25.99 points, or 1.90 percent, to 1,390.99, while the Nasdaq Composite was up by 58.13 points, or 2.00 percent, to 2,967.90.

The Indian ADRs closed in green on Friday, HDFC Bank was up 1.66%, Infosys was up 0.81%, Tata Motors was up 0.77%, ICICI Bank was up 0.71% and Dr. Reddy's Lab was up 0.69%.