The 30-share barometer rose by 179.37 points, or 0.93 per cent, to 19,525.07, led by the gains in oil and gas, metal, realty, power and capital goods stocks. The index had plunged 957 points in the previous six sessions.
Similarly, the wide-based National Stock Exchange index Nifty, gained 54.55 points, or 0.95 per cent, to 5,796.55.
Brokers said fresh round of buying by participants triggered by the government announcing plans for further liberalisation and a firming trend on the other Asian bourses, following the US Federal Reserve's decision to keep its stimulus scheme in place, mainly influenced the sentiment.
In Asia, Japan's Nikkei was trading 1.14 per cent higher, while Hong Kong's Hang Seng index up 0.622 per cent in early trade today.