The Sensex, which had lost 79 points in the previous session, recovered by 21.07 points, or 0.11 per cent, at 18,694.41.
Of 30 Sensex stocks, 12 gained while 18 closed lower. The BSE smallcap index rose by 0.53 per cent to 6,903.15 and mid-cap index by 0.46 per cent to 6,483.49.
Brokers said investors remained confident of government giving a further push to economic reforms, particularly after the Cabinet yesterday approved Rs 1.9 lakh crore debt restructuring of state electricity boards.
Power sector stocks, led by Torrent Power, ended with gains. Torrent rose by 1.78 per cent to Rs 171.10, Adani Power was up 1.09 per cent and Reliance Power 0.94 per cent.
Brokers said mild profit-booking trimmed the gains but markets more or less were in buoyant mode.
The broad-based National Stock Exchange index Nifty rose by 4.30 points, or 0.08 per cent to 5,673.90 led by stocks of realty and FMCG.