The BSE Sensex rebounded about 153 points in opening trade today on fresh buying in IT, teck, capital goods and healthcare counters amid mixed overseas cues.
Buying by domestic institutional investors and strengthening rupee also supported the recovery, brokers said.
Asian stocks traded mixed amid caution over US-China trade relations.
US stocks closed higher yesterday after minutes from the Federal Reserve's meeting reassured investors that the central bank will not be too aggressive with raising interest rates.
The 30-share Sensex rose 152.81 points, or 0.44 per cent, to 34,497.72, with sectoral indices IT, teck, capital goods, healthcare, power, consumer durables, bankex and realty advancing by up to 1.77 per cent.
The gauge had lost 306.33 points in the previous session.
The NSE Nifty also moved up by 38.15 points, or 0.36 per cent, to 10,468.50.
Major gainers were Infosys, Tata Steel, TCS, HDFC Ltd, Bharti Airtel, Coal India, Sun Pharma, Wipro, Yes Bank, Power Grid, Axis Bank and RIL, gaining up to 2.38 per cent
State-run lender SBI also extended its gaining streak for the third straight session, inching up 0.32 per cent to Rs 264.05.
However, Tata Motors plunged 4.41 per cent after the company yesterday reported a 49.82 per cent decline in consolidated net profit at Rs 2,176.16 crore for the March quarter with its British arm JLR continuing to face challenges in the UK and Europe, in addition to one time impairment charge.
Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 789.78 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 311.11 crore yesterday, as per provisional data.
Elsewhere in Asia, Hong Kong's Hang Seng rose 0.32 per cent while Shanghai Composite index was up 0.04 per cent in early trade today. However, Japan's Nikkei fell 1.10 per cent.
The Dow Jones Industrial Average ended 0.21 per cent higher in yesterday's trade but geopolitical and trade concerns continued to dent investor sentiment.
