The 30-share index, which had lost 1,044.96 points in the past seven sessions, recovered by 260.18 points, or 1.29 per cent, to 20,454.58 points.
The wide-based index of the National Stock Exchange, Nifty, moved up by 76.70 points, or 1.28 per cent to 6,066.30.
All the sectoral indices were trading in the positive territory with gains up to 2.70 per cent.
Brokers said fresh spell of buying by funds and retail investors in bank, realty, auto, capital goods, oil and gas and and power stocks, triggered by encouraging second quarter earnings announced by some companies and further recovery in the rupee, lifted the market.
They said, firming trend in overseas markets, too influenced the trading sentiment here.
Stocks of Tata Steel, the sixth largest steel producer in the world, gained 2.83 per cent to Rs 369 after company posted a consolidated net profit of Rs 916.77 crore for the second quarter ended September 30.
In Asia, Hong Kong’s Hang Seng Index was up 0.92 per cent, while Japan’s Nikkei Index was being quoted 1.40 per cent higher in morning trade today.
The US Dow Jones Industrial Average closed 0.45 per cent higher in yesterday’s trade.