Expectations of pro-growth Budget and hopes of more interest rate cuts supported markets, brokers said.
Globally, all eyes are Greek Finance Minister Yanis Varoufakis on Monday meeting his counterparts from the Eurozone in Brussels to seek their backing for an overhaul of the austerity-laden bailout.
Global markets are hoping a deal can be reached before the end of the month, when Greece's bailout is due to expire. Failure to agree an extension would see it default on its giant debts and likely mean it would crash out of Eurozone.
The 30-share Sensex hit a session high of 29,325.35 in the first half but succumbed to profit-booking at fag-end and slipped into the negative zone as it hit a low of 29,083.40.
However, gains in FMCG, auto and power shares helped the index settle with a rise of 40.95 points, or 0.14 percent, at 29,135.88. The gauge has now gathered over 908 points in the five straight sessions.
Also, the National Stock Exchange index Nifty edged up by 3.85 points, or 0.04 percent, to end at 8,809.35. Intra-day, it shuttled between 8,793.40 and 8,870.10.
During the day, government data showed Wholesale Price Index (WPI) inflation for January declined to a five and a half year low of (-) 0.39 percent.
Stocks of FMCG major ITC Ltd gained the most among Sensex constituents by rising 3.11 percent. Its peer, Hindustan Unilever also notched up a rise of 1.62 percent.
Others which supported the indices to close in positive zone included TCS, Bharti Airtel, HDFC Ltd, Cipla, Dr Reddy, GAIL, HDFC Bank, M&M, NTPC, ONGC, Tata Steel and Tata Motors.
Sun Pharma, however, suffered the most by falling 2.65 percent after company reported a 6.92 percent decline in its consolidated net profit for the third quarter ended December.
Sectorally, the BSE FMCG index gained the most by surging 1.79 percent, Realty gained 0.97 percent, Power by 0.61 percent, Auto by 0.45 percent, Capital Goods by 0.18 percent and IT by 0.17 percent.
Markets are closed on Tuesday on account of Mahashivratri.

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