The Stock Exchange of Thailand Index rose 7.28 points from Thursday to close at 1,325.33, an increase of 1.6% from the previous Friday's close of 1,304.21. Turnover was 30.89 billion baht, with 6.53 billion shares traded.
The local market is up 2% from the end of 2013.
SET chairman Sathit Limpongpan said that although the country faced challenges from both domestic and external factors, the business sector remained confident in the capital market.
He pointed out that as of Thursday the SET Index was up 1.5% on the year, outperforming Japan (-8.4%), other Asian countries (-3.0%) and United States indices (-2.3%).
The bourse's forward price/earnings ratio is currently 12.34 times, "which remains attractive compared with other markets in the region", he added.
"We believe that the volatility should just have short-term impact on investment. Thus, investment decisions should be mainly based on fundamentals and the outlook of the company," said Mr Sathit.
Foreign investors were net buyers on Friday of 825 million baht worth of Thai shares, trimming their net sales for the month to 21.3 billion baht. For the year to date they are net sellers of 35.4 billion baht.
Local institutions were net buyers of 1.45 billion baht while brokers sold 567.2 million. Individual investors were net sellers of 1.71 billion baht.
Asian markets were mixed on Friday after US Federal Reserve chief Janet Yellen provided an upbeat view of the US economy. However, she also hinted that the central bank could ease back on its stimulus reductions if the growth outlook weakens.
The comments provided the platform for a record close on Wall Street, while currency traders sold the dollar on the possibility that Fed bond-buying could continue for longer.
Tokyo lost 0.55%, or 82.04 points, to end at 14,841.07 owing to the stronger yen, while Sydney was off 0.12% at 5,404.8. Seoul was flat, nudging up 1.56 points to 1,979.99. Hong Kong closed flat, edging up 8.78 points to 22,836.96, while Shanghai rose 0.44% to 2,056.30. Taipei was closed for a public holiday.
European stocks were little changed in early trade as investors awaited reports on American housing, consumer spending and economic growth.
In Bangkok, the SET50 index of blue chips ended at 899.51 points, up 5.35 points, with total trade value of 22.58 billion baht. The SETHD index of high-dividend shares rose 8.57 points to 1,087.49, with turnover of 13.2 billion baht. The Market for Alternative Investment gained 2.61 points to 376.45, with transaction value of 841.3 million baht.
The five most active shares by value were BBL, down 1 baht to 172; PTT, up 6 baht to 293; SCC, up 10 baht to 430; KBANK, up 1 baht to 171.50; and ADVANC, unchanged at 211 baht.
In the currency markets, the baht declined 0.4% on the week but ended February with a 1.2% gain from the month before.
Gains in global stocks have improved risk sentiment overall, offsetting concern that local political unrest is damaging growth.
"The baht saw some recovery [in February] in line with improving emerging-market sentiment in general," said Tsutomu Soma, manager of fixed-income business at Rakuten Securities in Tokyo. "But I don’t think we will see aggressive buying as political unrest is making investors reluctant to buy Thailand."
The baht was trading late Friday in Bangkok at 32.64 to the dollar, compared with 32.60/63 on Thursday and 32.53/56 a week earlier.
However, the baht has dropped 4.6% since the anti-government protests started on Oct 31, the worst performance in Asia.
Two-year government bonds rose this month on speculation the Bank of Thailand will reduce its policy rate to support the sluggish economy.
The central bank's Monetary Policy Committee unexpectedly held its rate unchanged at 2.25% on Jan 22. Its next meeting will take place on March 12 and most analysts expect a quarter-point reduction.