In addition, a firming trend on other Asian bourses also buoyed the trading sentiment here.
The 30-share barometer, which gained nearly 153 points in the previous session, added 151.98 points, or 0.94 per cent, to 16,335.24.
All sectoral indices, led by capital goods and consumer durables, were trading in the positive zone with gains of up to 1.37 per cent.
The wide-based National Stock Exchange index Nifty moved up by 43.55 points, or 0.89 per cent, to 4,949.60.
Brokers said rupee bouncing back to 54.86 in early trade, which had plunged to all-time low of 55.04 in yesterday's trade against the dollar and a firming trend on other Asian markets following overnight gains in the US stocks, boosted the trading sentiment here.
Meanwhile in the Asian region, Hong Kong's Hang Seng Index rose by 0.61 per cent and Japan's Nikkei Index by 1.02 per cent in morning trade. The US Dow Jones Industrial Average ended 1.09 per cent higher in yesterday's trade after upbeat housing data and stronger-than-expected corporate earnings.
