The BSE benchmark index, which had gained 183 points in the previous session, opened marginally up and closed with a gain of 61.17 points, or 0.33 per cent, at 18,823.91.
Trading remained firm on continued buying by funds and retail investors on hopes that the government will soon announce more economic reforms, market experts said.
European indices that were up one per cent each on reports of positive economic data, also aided the domestic sentiment.
Brokers said investors adopted a selective approach after the 30-share barometer gained 7.7 per cent in September -- a month where the government hiked diesel price, allowed foreign direct investment in retail and aviation, among others.
The 50-share National Stock Exchange index Nifty today gained 15.50 points, or 0.27 per cent, to 5,718.80.
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Infosys rose by 2.96 per cent, after recording heavy losses in the last few sessions. TCS also rose 0.66 per cent. The rupee was trading at 52.5 level a dollar.
Select auto stocks also notched up smart rise after posting better-than-expected September sales. Tata Motors gained 2.65 per cent, TVS Motors went up by 4.26 per cent and Maruti Suzuki inched up 0.53 per cent.
ITC, which rose 0.6 per cent, also helped Sensex rise.
Profit-booking was seen in some private banks after strong rally witnessed in last two weeks, said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio. ICICI Bank and HDFC Bank fell in 0.7-0.9 per cent range but SBI gained 1.4 per cent.
Infrastructure-related stocks, mostly outside Sensex, including IVRCL, NCC, Jaiprakash Asso and Reliance Infra advanced as end of Monsoon season is likely to revive construction activity, said analysts.
Retail buying in midcap and smallcap shares helped the individual BSE indices outperform the Sensex.
The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will remain closed tomorrow, October 2, for observing "Mahatma Gandhi Jayanti".(MORE)
