The 30-share index rose by 155.35 points, or 0.76 per cent, to trade at 20,575.61. The Sensex had lost 184.82 points in the previous two sessions.
All sectoral indices were trading in the positive zone with gains up to 1.24 per cent.
The wide-based National Stock Exchange index Nifty recovered by 44.60 points, or 0.74 per cent, to 6,101.70.
Brokers said covering-up of short positions by participants as today being the last session of current month expiry in the derivatives segment and a firming trend in the Asian region, in line with overnight gains on the US markets fuelled by upbeat jobs figures, mainly influenced the trading sentiment.
In the Asian region, Japan’s Nikkei Index was up 1.18 per cent, while Hong Kong’s Hang Seng index gained 0.68 per cent in early trade.
The US Dow Jones Industrial Average ended 0.15 per cent higher in yesterday’s trade.