the battered rupee, a Reuters poll found.
Indian manufacturers increased production in August, although at a slower pace than in July, as infrastructure output rose, but access to cash was tougher, a Reuters poll found.
Local shares were also buoyed by signs of progress in U.S. budget talks which also helped European stocks edge off four-week lows.
"While the market is trading in a range, directional cues will come from how the results season pans out. Expect stock specific volatility to rise over the next few days," said Milan Bavishi, head of research at Inventure Growth and Securities.
The benchmark BSE index rose 0.12 percent, or 23.65 points, to end at 20,272.91 after marking its highest intraday level since Sept. 19.
The broader NSE index rose 0.22 percent, or 13.50 points, to end at 6,020.95.
Tata Motors' shares rose 4.9 percent after unit Jaguar Land Rover Ltd said in a statement that its September retail sales were up 17 percent, which dealers said were above expectations.
Infosys Ltd ended up 0.6 percent ahead of its July-September earnings results on Friday.
Among other IT stocks, Wipro Ltd ended 0.6 percent higher, while Tech Mahindra Ltd rose 2.5 percent.
Glenmark Pharmaceuticals Ltd rose 1.4 percent after unit Glenmark Generics said it has filed lawsuit against Triax Pharmaceuticals, Astellas International, Astellas Pharma Europe, seeking to enforce Glenmark's exclusive royalty agreement for a key drug.
Multi Commodity Exchange of India Ltd gained 5 percent after a stock and currency exchange partly owned by the company announced changes to its management and board.
MphasiS Ltd gained 2.5 percent, tracking gains in parent Hewlett-Packard Co, which rose after its chief executive on Wednesday guided for a stable outlook for 2014 and a recovery in 2015, dealers said.
However, among stocks that fell, Reliance Industries Ltd dropped 0.1 percent ahead of its September-quarter results on Monday.