The Bombay Stock Exchange benchmark Sensex closed higher by 184.17 points, or 0.93 per cent, at 20,045.18 - its best finish since January 15, 2008, when the index settled at 20,251.09.
The Bombay Stock Exchange benchmark Sensex climbed by 184 points to a fresh 32-month high on Friday, regaining the magical 20,000 points level after a gap of two days on sustained capital inflows from overseas investors.
Wiping out losses suffered in the past two sessions, the 30-share barometer of the Bombay Stock Exchange closed higher by 184.17 points, or 0.93 per cent, at 20,045.18 - its best finish since January 15, 2008, when the index settled at 20,251.09.
During the week, the Sensex recorded a gain of 2.29 per cent.
The rally was led by strong demand for blue-chips like HUL, ITC, Bharti Airtel, ONGC, realty and banking stocks.
Shrugging off weak global cues, the wide-based Nifty-50 Index of the National Stock Exchange also rose by 58.75 points to 6,018.30.
The market opened slightly lower, tracking weak Asian peers after an increase in US jobless claims dampened the outlook for global economic growth. However, the Sensex soon recovered and hit a high of 20,071.75 in the final hour of trade.
FMCG major HUL hit a life-time high in today's session and ended 3.2 per cent higher - the most in the Sensex - at Rs 312.5. ITC also saw demand and closed 0.76 per cent higher.
The rush for telecom stocks pushed up Bharti Airtel by nearly 3 per cent and its rival RCom by 1.76 per cent.
All the sectoral indices ended in the green, with realty, FMCG, consumer goods and bankings leading the gains.
Analysts said the sentiment was upbeat on Dalal Street after yesterday's announcement of a $5 billion increase in the overall foreign investment limit in both government and corporate debt securities.
Mirroring their strong confidence in the Indian stock market, overseas investors have pumped $17.46 billion into domestic equities in just nine months, surpassing foreign fund inflows during the whole of 2009.
The government announced two important measures aimed at increasing foreign capital inflows into the government and corporate debt market. Furthermore, the announcement of the government's borrowing programme in the second half of the current fiscal being slashed by Rs 1,000 crore, signalling its improved fiscal position, also drove the rally in domestic equities.
"An increased capital flow through debt route may come handy to comfortably finance the trade gap and strengthens the outlook for the rupee at the margin," Brokerage firm Motilal Oswal said in a note.