The stock markets were also supported by a strengthening rupee that gained 28 paise to trade at 62.34 versus dollar, which was under pressure after the US government shutdown - for the first time in nearly 18 years - as political deadlock over 'Obamacare' led to a budget impasse.
The 30-share Sensex, which fell by over 100 points in early trade, reversed losses to end at 19,517.15, a gain of 137.38 points or 0.71 per cent. The rise comes after the benchmark lost 514 points in the previous two sessions.
On similar lines, the broad-based National Stock Exchange index Nifty shuttled between 5,786.45 and 5,700.95, before ending 44.70 points higher, or 0.78 per cent at 5,780.05.
"CAD widened by USD 21.8 billion in Q1FY14, below our expectation of USD 25 billion," said Karvy Analyst Kruti Shah.
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The upsurge in shares was mostly led by the recent losers like stocks of banking, realty, capital goods and auto stocks on heavy purchased at current attractive levels, brokers said.
They also said a higher trend in the Asian region and good opening in Europe, further influenced the sentiment.
Among Sensex constituents, 16 stock gained led by SBI, ICICI Bank, HDFC Bank, HDFC Ltd., Maruti Suzuki, M&M, Tata Motors, Bajaj Auto, BHEL, L&T and Bharti Airtel.
September sales of firms like Maruti, Hero MotoCorp and TVS rose in 12-16 per cent range while that of M&M slipped.
Sectorally, the BSE Realty sector index gained the most by rising 2.69 per cent, followed by BSE Banking index (2.67 per cent), BSE Capital Goods index (1.53 per cent) and BSE Auto index (0.90 per cent).