The Sensex, which had slipped to 16,553.47 at the outset, recovered sharply to trade 74.96, 0.44 per cent, to 16,742.97 at 1300 hrs.
On similar lines, the wide-based National Stock Exchange index Nifty rose by 19.90 points, or 0.39 per cent, to 5,074, after touching a low of 5,015.15 in early trade.
Brokers said industrial production growth rate slowed sharply to 0.1 per cent in April from 5.3 per cent in the previous year reflecting sluggish state of the economy that may prompt RBI to cut lending rates.
They said a firming trend in the Asian region further supported the market to recover from early losses.
