The 30-share index, which had lost 189.30 points in the previous two sessions, rebounded by 439.55 points, or 2.12 per cent, to trade above 21,000 level at 21,148.26.
All the sectoral indices, led by banking, capital goods and realty, were trading in positive zone with gains up to 4.02 per cent.
The wide-based National Stock Exchange index Nifty spurted by 121.90, or 1.98 per cent, to 6,282.85.
Major gainers are ICICI Bank, SBI, HDFC Bank, RIL, Infosys, TCS, ITC, Bharti Airtel, Bajaj Auto, Larsen and Toubro and BHEL.
In the Asian region, Japan's Nikkei fell 0.35 per cent, while Hong Kong's Hang Seng was down 0.40 per cent in early trade today.
The US Dow Jones Industrial Average closed 0.16 per cent lower in yesterday's trade.