The Nifty rose 0.8 percent on Wednesday to breach the 6,000 mark for the first time in two years after the US House of Representatives approved a deal on the so-called fiscal cliff, sparking broad-based buying.
"An encouraging report on the country's manufacturing activity in December is adding to market momentum," said Nirmal Bang in a research report.
The HSBC Markit India Manufacturing PMI, which gauges the business activity of India's factories, jumped to 54.7 in December from 53.7 in November, its biggest monthly rise since January 2012.
In currency markets, rupee strengthened on increase in dollar selling by exporters and banks amid sustained foreign capital inflows.
The Nifty was up 0.8 percent as of 11:23 a.m., after earlier rising to as high as 6,000.50 points, trading above that key psychological level for the first time since January 7, 2011.
The benchmark 30-stock BSE Sensex rose 0.79 percent.
With inputs from Reuters