The 30-share barometer gained by 74.93 points, or 0.29 per cent, to 25,519.74. The index had lost 655.27 points in the previous two sessions.
Sectoral indices led by capital goods, power, metal auto and PSU were trading in positive zone with gains up to 0.44 per cent.
Similarly, the wide-based National Stock Exchange Nifty index moved up by 6.25 points, or 0.08 per cent, to 7,591.25.
Brokers said fresh positions built-up by cautious participants on expectations of some sops in the Union Budget 2014-15 to be announced later in the day buoyed the trading sentiment.
Besides, a firming trend in the Asian region, taking a strong lead from Wall Street, in response to an upbeat outlook for the US economy by the Federal Reserve influenced the sentiment, they said.
Among other Asian markets, Hong Kong’s Hang Seng index was up by 0.45 per cent, while Japan’s Nikkei index gained 0.10 per cent in early trade on Thursday. The US Dow Jones Industrial Average ended 0.47 per cent higher on Wednesday.