The 30-share index started the day lower at 19,904.47 on profit booking triggered by weak IIP and retail inflation numbers that came after trading hours on Friday. It, however, reversed the falling trend during the day and closed 76.01, or 0.38 per cent higher at 20,034.48.
This is the first time that the index has closed above the 20,000 mark since 20,215.40 on May 30.
Brokers said the trading sentiment improved as wholesale- price index based inflation rose less than the market expectations and optimism over the earnings season which took a firm start with Infosys posting smart numbers. The WPI-based inflation rose 4.86 per cent in June compared with a 4.7 per cent in May.
They said a firming trend in global markets as Chinese economic growth matched forecasts further influenced the trading sentiment.
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Other major gainers included Tata Consultancy Services (2.20 per cent), Bharti Airtel (3.20 per cent) and Hindustan Unilever (2.06 per cent).
Sector-wise, the realty sector index gained the most by 1.94 per cent to 1,547.66, followed by FMCG by 1.19 per cent to 7,030.41.
However, the third most heavy on the index Infosys fell by 2.17 per cent to Rs 2,741.85 on profit booking. The stock had surged 12 per cent in the previous session after reporting higher quarter earnings.