The benchmark BSE Sensex opened 208 points higher on Wednesday, snapping its three-day falling streak, as investors and domestic institutions widened their bets amid firm Asian cues.
Short-covering by speculators ahead of February F&O expiry on Thursday added to the upward move.
NSE Nifty also reclaimed the 10,400-mark rising 65.70 points, or 0.63 per cent, to 10,426.10.
The BSE 30-share barometer gained 207.77 points, or 0.61 per cent, to 33,911.36. The gauge had lost 593.88 points in the previous three sessions.
Sectoral indices led by IT, Teck, consumer durables and realty stocks were in the green, rising up to 0.91 per cent.
Major gainers were Dr Reddy's, TCS, Infosys, HDFC, Bharti Airtel, ITC, Wipro and RIL, gaining up to 1.61 per cent.
Meanwhile, Coal India dropped 1.4 per cent in early trade on government decision to open the coal sector to private players.
Gitanjali Gems remained weak and cracked another 9.85 per cent, while Punjab National Bank traded higher by 1.24 per cent in early deals.
Brokers said fresh buying in select blue chip stocks, coupled with covering-up of outstanding short positions ahead of the February F&O expiry on Thursday, had a positive impact on the market.
Sustained buying by domestic institutional investors (DIIs)and a firm trend in other Asian bourses with investors awaiting the release of minutes from the US Federal Reserve's policy meeting later today too influenced sentiments, they said.
On a net basis, DIIs bought shares worth Rs 1,437.24 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 850.35 crore on Tuesday, as per provisional data released by stock exchanges.
In the Asian region, Hong Kong's Hang Seng was up 1.15 per cent and Japan's Nikkei up 0.64 per cent in early trade, while Shanghai Composite index remained shut today. The US Dow Jones Industrial Average ended lower by 1.01 per cent in Tuesday's trade.