The 30-share index was trading higher by 133.63 points, or 0.49 per cent, at 27,369.29, with metal, auto and banking leading the recovery by rising up to 1.21 per cent.
The gauge had lost 52.51 points in the previous session after IMF sharply lowered India's GDP estimates.
Besides, the NSE Nifty regained the 8,400-mark by rising 44.45 points, or 0.53 per cent, at 8,442.45.
Traders said fresh buying by investors amid reports of fresh spell of foreign funds inflows on domestic bourses influenced sentiment.
Support came from key indices such as Tata Steel, ONGC, HDFC, Adani Ports, HDFC Bank, Wipro, Asian Paints, Axis Bank, Tata Motors, L&T and ITC, rising by up to 1.78 per cent.
Furthermore, a mixed trend at other Asian markets lent the rebound some muscle here.
China's Shanghai Composite index was up 0.12 per cent while Hong Kong's Hang Seng was also trading 1.12 per cent higher in early trade. Japan's Nikkei, however, fell 0.20 per cent.
The US Dow Jones Industrial Average fell 0.30 per cent on Tuesday.