The 30-share index was trading higher by 149.05 points, or 0.46 per cent at 32,746.23. All the sectoral indices led by capital goods, power, oil & gas and PSU were trading in the green with gains of up to 1.20 per cent.
The gauge had lost 205 points yesterday following the Reserve Bank's decision to leave interest rates unchanged and raised the inflation forecast for the remainder of the current fiscal to 4.3-4.7 per cent.
Also, the NSE Nifty recovered by 49.25 points or 0.49 per cent to 10,093.35.
Brokers said buying by domestic institutional investors (DIIs) and a firm trend at other Asian bourses improved the market sentiment.
More From This Section
DIIs had bought shares worth Rs 995.11 crore, while foreign funds sold shares to the tune of Rs 1,217.92 crore yesterday, the provisional exchange data showed.
In the Asian region, Hong Kong's Hang Seng was up 0.10 per cent while Japan's Nikkei gained 1.27 per cent in early trade today. Shanghai Composite Index, however, shed 0.52 per cent.