Besides, appreciating rupee which strengthened to two-week high of 61.09 against the dollar and easing global crude prices that have hit two-year low, buoyed sentiments.
The 30-share barometer, which had lost over 383 points in the previous three sessions, recovered by 312.81 points, or 1.19 percent, to 26,559.60.
All the sectoral indices led by capital goods, realty and metal were trading in positive zone with gains up to 1.58 percent.
Also, the National Stock Exchange index Nifty, regained the psychological 7,900-mark by surging 92.65 points, or 1.18 percent, to 7,935.35.
Brokers said sentiments turned better, tracking rebound on other Asian markets in response to minutes from US Federal Reserve indicating that policymakers are wary about raising interest rates sooner than later.
Among other Asian markets, Japan's Nikkei rose 0.45 percent while Hong Kong's Hang Seng was also trading 0.88 percent higher in early trade.
The US Dow Jones Industrial Average ended 1.64 percent up in Wednesday's trade.

Latest News from Business News Desk