The 30-share barometer, which has gained over 55 points in the previous two sessions, rose by 169.46 points, or 1.06 per cent, to 16,190.10.
All sectoral indices, led by banking and auto, were trading in positive zone with gains of up to 1.25 per cent.
Similarly, the wide-based National Stock Exchange index Nifty moved up by 51.10 points, or 1.05 per cent, to 4,914.40.
Brokers attributed the rise to sustained buying by funds and retail investors amid a firming trend on other Asian bourses followed by overnight gains in the US market.
In the Asian region, Japan's Nikkei was up by 1.31 per cent, while Hong Kong's Hang Seng index gained 0.50 per cent in early trade. The US Dow Jones Industrial Average ended 0.22 per cent higher yesterday.