The Reserve Bank's move to improve liquidity in the banking system helped capital gain strength.
The benchmark Sensex gained 89 points to close at 19,984. It touched a high of 20,150 and a low of 19,937 as most stocks constituting the index were in demand.
In the NSE, the Nifty gained 22 points to 5,928.
Jet Airways dipped four per cent to Rs 357 on reports that the Supreme Court has sought clarification on the approval given to the Jet-Etihad Airways deal by the Central Government.
Tata Power rose three per cent to Rs 84 after its wholly-owned subsidiary, Tata Power Renewable Energy, signed a share purchase agreement for the acquisition of 100 per cent shareholding in AES Saurashtra Windfarms, a wholly-owned subsidiary of AES Corporation.
NTPC was up two per cent at Rs 144 after the company said Unit-VI of the 500 MW Rihand Super Thermal Power Project was commissioned.
The major gainers of the day were Mcleod Russel (6 per cent), Torrent Power (5 per cent), Idea Cellular (5 per cent), Wockhardt (5 per cent), Prestige Estates (5 per cent), Yes Bank (4 per cent), HDIL (4 per cent), Tata Comm (3 per cent) and Tata Power (3 per cent).
The losers included Godrej Cons (-4 per cent), TV18 Broadcast (-4 per cent), United Phos (-3 per cent), BPCL (-3 per cent), J&K Bank (-3 per cent), Shriram City (-3 per cent), Siemens (-2 per cent), Zee Entert (-2 per cent), M&M Fin (-2 per cent) and Shree Cement (-2 per cent).