Covering-up of short positions by speculators, too, helped stocks to recover part of lost grounds.
The 30-share barometer, which had lost over 401 points in the past two sessions, recovered by 72.77 points, or 0.43 per cent, to 16,950.12 points with all the sectoral indices led by FMCG and oil and gas, were trading in positive zone with gains up to 0.56 per cent.
The wide-based National Stock Exchange index Nifty also moved up by 15.50 points, or 0.30 per cent, to 5,133.45.
Shares of Hindsutan Unilever, country's largest consumer goods maker, surged 3.70 per cent to Rs 459.25.
Brokers said emergence of buying by funds as well as retail investors at existing levels after Hidnustan Uniliver posted over two-fold jump in its net earnings for the quarter ended June 30, 2012 mainly boosted the sentiment.
They said, however, a weak trend in overseas markets on renewed euro zone sovereign debt concerns that Spain was headed for a full state bailout, restricted the gains.
In the Asian region, the Japan's Nikkei fell by 0.20 per cent, while opening on the Hong Kong's Hang stock market delayed due to Typhoon Vicente lashing the city. The US Dow Jones Industrial Average ended 0.79 per cent down in yesterday's trade.