The 30-share index rose by 88.71 points, or 0.40 per cent, to 22,412.61 points with metal, healthcare, realty and power sector stocks leading the recovery. The index had lost 184.52 points in yesterday's trade.
The National Stock Exchange index Nifty moved up by 25.10 points, or 0.38 per cent, to 6,677.65.
Brokers said fresh buying by funds and retail investors, triggered by a better trend at other Asian bourses following overnight gains in the US markets on upbeat comments from Fed chief on the economy, influenced the trading sentiment here.
US Fed Chief told Congress that the economic outlook was positive and that the stimulus taper would continue steadily.
Among other Asian markets, Hong Kong's Hang Seng rose by 0.36 per cent, while Japan's Nikkei was up by 1.09 per cent in early trade today.
The US Dow Jones Industrial Average gained 0.72 per cent in the previous session.