Besides, covering-up of short positions in view of February's expiry in the derivatives segment, supported the upside.
The 30-share barometer, which had gained 32.88 points in the previous two sessions, rose by 61.14 points, or 0.21 per cent, to 29,069.13.
Similarly, the National Stock Exchange index Nifty moved up by 18.80 points, or 0.21 per cent, to 8,786.05.
Stocks of companies related to Railways such as Titagarh Wagon and BEML rose by 0.79 per cent each at Rs 583.80 and Rs 987.90, respectively.
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Besides, oil & gas, realty, capital goods, consumer durables, metal and auto stocks were in some demand, accounting for most of the gains on both Sensex and Nifty.
Meanwhile, Hong Kong's Hang Seng was down by 0.26 per cent, while Japan's Nikkei index was up by 0.55 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.13 per cent lower in yesterday's trade.