The 30-share index was up 220.49 points or 0.7 percent at 31,504.13. Realty, metal, power and auto were in the positive zone, rising by over 1.5 percent.
The gauge had lost 27.93 points in the previous two sessions.
The NSE Nifty also moved up by 57.60 points, or 0.6 percent, to 9,691.20.
Among a host of key decisions yesterday, Sebi relaxed its takeover norms for restructuring listed companies with stressed assets, which is expected to bolster efforts in fight against bad loans.
Some short covering helped stocks too bounce back.
Major contributors to the recovery were HDFC Ltd, PowerGrid, Asian Paints, Tata Motors, Tata Motors DVR, Sun Pharma and Axis Bank, gaining up to 1.37 percent.
Hong Kong’s Hang Seng rose 0.18 percent while Shanghai Composite rose 0.72 percent in early trade today. Japan’s Nikkei fell 0.10 percent.
The Dow Jones Industrial Average ended 0.27 percent down yesterday.