The 30-share barometer rose by 141.43 points, or 0.67 per cent, to close at 21,205.05 points. The index, which lost 226 points in the last two sessions, touched a low of 21,001.13 points in day trade.
Brokers said sentiment improved as the third-largest software provider Wipro posted attractive earnings for the third quarter ending December 2013.
The IT sector index advanced the most rising by 2.83 per cent to 9,661.46. Tata Consultancy Services (TCS) rose by 5.53 per cent, Wipro by 3.77 per cent and Infosys by 0.59 per cent.
The broad-based NSE Nifty rose by 52.30 points, or 0.68 per cent to 6,303.95. It touched the day's low of 6,243.35.
Weak overseas trends and a fall in index major Reliance Industries (RIL), however capped the gains. RIL fell by 1.70 per cent to Rs 869.50.
Among 30-Sensex stocks, 16 closed with gains. Bharat Heavy Electricals Ltd (BHEL), Axis Bank, HDFC Bank, Hero MotoCorp, ICICI Bank, ITC Ltd, Mahindra & Mahindra Ltd and State Bank of India (SBI) were among major gainers.
The Teck index was the second best performer and rose by 2.50 per cent to 5,275.54, followed by FMCG index which settled up by 1.08 per cent to 6,619.06.
* BSE index gains 0.67 pct; NSE up 0.68 pct
* IT shares such as TCS, Wipro lead gains
* Banking shares up; Reliance Industries down on earnings
Indian shares snap 2-day losing streak, tech stocks gain
(Reuters) Indian shares rose on Monday after two days of losses as software services exporters gained after Wipro posted solid earnings and joined domestic rivals in giving a positive outlook for the sector.
Value-buying also boosted recent underperformers, including lenders such as State Bank of India and more defensive stocks such as cigarette maker ITC Ltd.
However, broader gains were capped as Reliance Industries Ltd fell after its October-December quarterly profit when adjusted for other income was seen lagging expectations.
Investors are also growing hopeful the Reserve Bank of India will keep interest rates on hold