Besides, covering-up of short positions by speculators in some stocks also helped trading sentiments to improve.
The 30-share index rose by 130.02 points, or 0.59 per cent, to 21,870.11, with all the sectoral indices led by realty and capital goods were trading in positive zone, rising up to 0.97 per cent. The index had lost 92.77 points in the previous session.
The wide-based Nifty of the National Stock Exchange, regained 6,500 level by recovering 35.30 points, or 0.54 per cent, to trade at 6,518.40.
Brokers said value-based buying by funds and retail investors at select counters, having strong fundamentals amid a better trend on the other Asian markets after US markets posted gains yesterday on fresh positive economic data, mainly buoyed the trading sentiment here.
In other Asian markets, Hong Kong's Hang Seng gained 0.16 per cent in early trade today, while Japan's market closed for a public holiday.
The US Dow Jones Industrial Average ended 0.67 per cent higher yesterday.
Live: BSE Sensex