The 30-share barometer, which shed 4.48 points in the previous choppy session, recovered by 112.03 points, or 0.69 per cent, to 16,329.85.
All sectoral indices, led by auto and banking, were trading in the positive zone with gains of up to 0.81 per cent.
The wide-based National Stock Exchange index Nifty moved up by 34.20 points, or 0.69 per cent, to 4,954.60.
Brokers said fresh buying by funds and retail investors, following recovery in the rupee for the third straight day against the American currency and a firming trend on Asian bourses boosted the trading sentiment here.
The rupee was trading 32 paise higher at Rs 55.05 against the US dollar in early trade.
In the Asian region, Hong Kong's Hang Seng Index rose by 0.24 per cent and Japan's Nikkei Index up by 0.02 per cent in morning trade.