Besides, expectations of encouraging IIP data for May to be released later in the day, also supported the upside.
Brokers said a slew of measures proposed in the Union Budget to revive economic growth and investor confidence also influenced the sentiments.
The 30-share index recovered by 167.57 points, or 0.66 per cent, to 25,540.32, with stocks of realty, IT, tech, capital goods, auto and power sectors, leading the recovery.
The gauge had lost 727.33 points in the previous three sessions.
Similarly, the National Stock Exchange index Nifty edged higher by 40.25 points, or 0.53 per cent, to 7,608.00.
Shares of Infosys rallied 3.07 per cent to Rs 3,394.15 in early trade.
Other IT stocks which also gained were TCS (up 1.81 per cent to Rs 2,390.30) and Wipro (up 1.61 per cent to Rs 553.55).
Besides, major gainers that supported the Sensex were Tata Motors, Bajaj Auto, Axis Bank, Dr Reddy’s Lab, Maruti Suzuki, Hero MotorCorp, L&T, and Sun Pharma.
Among other Asian markets, Japan’s Nikkei fell 0.75 per cent while Hong Kong’s Hang Seng shed 0.36 per cent in morning trade today.
The US Dow Jones Industrial Average ended 0.42 per cent lower in yesterday’s trade as fears over eurozone debt resurfaced with a payment crisis at Portugal’s biggest listed bank.