The 30-share index bounced by 134.93 points, or 0.38 per cent to 35,334.73, with sectoral indices led by IT, teck, FMCG and oil and gas stocks advancing up to 1.15 per cent.
The barometer had lost over 575 points in the previous two sessions.
Also, the NSE Nifty was up 36.75 points, or 0.36 per cent, at 10,636.80.
Brokers said fresh buying by domestic institutional investors (DIIs) and retailers, coupled with strengthening rupee against the US dollar and falling global crude oil prices, influenced trading sentiments here.
Negative Asian cues, however, capped the gains.
The rupee rose by 35 paise to trade at 71.11 against the dollar in early trade at the interbank forex market Thursday.
Prominent gainers were TCS, Yes Bank, ONGC, Vedanta, Wipro, HDFC, Adani Ports, RIL, IndusInd Bank, L&T, HUL, Tata Motors, ITC and HDFC Bank, rising up to 1.57 per cent.
However, Bharti Airtel emerged worst Sensex performer, falling over 2 per cent, followed by M&M PowerGrid, Tata Steel and SBI.
Meanwhile, domestic institutional investors (DIIs) bought shares worth a net of Rs 606.73 crore, while foreign institutional investors (FIIs) sold shares to the tune of Rs 1,652.04 crore Wednesday, provisional data showed.
Elsewhere in Asia, Japan's Nikkei fell 0.02 per cent, Shanghai Composite Index shed 0.55 per cent, Hong Kong's Hang Seng dropped 0.31 per cent and Singapore declined 0.30 per cent in early trade.
The US Dow Jones Industrial Average gave up initial gains to end almost flat Wednesday.