The 30-share barometer, which had lost 235 points in the last two trading sessions, recovered by 84.29 points, or 0.53 per cent, to 16,032.39.
The wide-based National Stock Exchange index Nifty also moved up by 18.95 points, or 0.39 per cent, to 4,854.60.
Brokers said besides buying by funds and retail investors, flat closing on the US market after initial losses in yesterday's trade helped sentiments to improve.
Stocks of oil marketing companies were in demand following a steep hike in petrol prices which would reduced subsidy burden and improve their earnings, helping Sensex to trade in the positive zone.
The oil and gas sector index rose by 1.59 per cent to 7,553.52 points as shares of BPCL gained 3.06 per cent, Oil India was up 4.02 per cent, ONGC rose 2.43 per cent and Reliance Industries gained 0.34 per cent.
In Asia, Hong Kong's Hang Seng Index shed 0.15 per cent, while Japan's Nikkei index was down 0.24 per cent in the morning trade.
