The 30-share barometer, after losing 235 points in the past two trading sessions, bounced back to regain 16,000-point level to close at 16,222.30, showing a rise of 274.20 points or 1.72 per cent. Out of the 30 Sensex stocks, 24 scrips ended higher.
ONGC with 5.74 per cent gains led the Sensex rally, followed by Bharti Airtel (5.62 pc) and HDFC (4.38 pc).
Brokers said moderate recovery in the rupee from intra-day lows of Rs 56.38 and a steep hike in petrol prices of Rs 7.54 per litre by oil marketing companies that would lower their subsidy burden mainly buoyed the trading sentiments.
Further, a higher opening in the European markets also had a positive impact on trading mood, dealers said.
All the 13 sectoral indices, led by banking and oil and gas, ended in the positive territory with gains up to 2.33 per cent.
Similarly, the broad-based National Stock Exchange index Nifty regained the key 4,900 level and closed 85.75 points, or 1.77 per cent higher at 4,921.40.
Among state-run oil companies, BPCL gained 0.55 per cent to Rs 725.90, ONGC 5.74 per cent to Rs 256.95, Oil India by 0.80 per cent to Rs 452.60 and GAIL India by 0.43 per cent to Rs 325.35. Shares of Reliance Industries also ended 1.35 per cent higher at Rs 696.45 apiece.
Meanwhile, rupee strengthened by 18 paise to trade at 55.82 against the American currency on the Interbank Foreign Exchange market in pre-close trade today on selling of the dollar by banks and exporters.
