The BSE benchmark index rose by 50.54 points, or 0.26 per cent, to 19,764.78, a level last seen in January 2011. The 30-share index had gained 288 points in previous two sessions.
Similarly, the 50-share NSE index Nifty ended 16.25 points up, or 0.27 per cent, at 6,009.50. This was the first time in two years that NSE Nifty closed above the 6,000-mark.
"Markets consolidated after recent rally, but inched higher to close above 6,000 mark led by gains in IT and Oil & gas stocks. Throughout the day, profit-booking was visible in banking stocks and momentum shifted to mid cap and small cap counters," said Amar Ambani, Head of Research, IIFL.
Reliance Industries and ONGC gained around 1.5-1.9 per cent. In the IT pack, Infosys and TCS jumped by 1.24 per cent each while Wipro inched up by 0.93 per cent.
Brokers said the sentiment was bolstered after the US budget bill was cleared and reports said the Institute for Supply Management's US factory index rose to 50.7 in December from 49.5 a month ago, signalling better outlook for IT firms.
Besides, hopes of attractive quarterly results by IT major Infosys next week and a interest rate cut by the Reserve Bank of India later this month boosted the sentiment, they added.
Dr Reddy's gained 2.35 per cent after launching generic Finasteride tablets with 180-day exclusivity in the US.
Bharti Airtel rose 2 per cent in line with peers with non-index constituents Idea, Rcom and MTNL up 3.5-4.6 percent.
However, after clocking gains in recently, shares of HDFC Bank, L&T, HDFC and ICICI Bank saw profit booking.
Support from Asian stocks which rose to 17-month high and a firm opening in Europe, helped Indian indices cement gains. (MORE)
