The benchmark BSE Sensex recovered nearly 89 points in early trade on Thursday on emergence of buying by funds and retail investors amidst a firming trend in global markets after Federal Reserve Chief Janet Yellen's upbeat outlook on the US economy.
The 30-share index rose by 88.71 points, or 0.40%, to 22,412.61 points with metal, healthcare, realty and power sector stocks leading the recovery.
The index had lost 184.52 points in on Wednesday's trade.
The National Stock Exchange index Nifty moved up by 25.10 points, or 0.38%, to 6,677.65.
Brokers said fresh buying by funds and retail investors, triggered by a better trend at other Asian bourses following overnight gains in the US markets on upbeat comments from Fed chief on the economy, influenced the trading sentiment here.
US Fed Chief told Congress that the economic outlook was positive and that the stimulus taper would continue steadily.
Among other Asian markets, Hong Kong's Hang Seng rose by 0.36%, while Japan's Nikkei was up by 1.09% in early trade on Thursday. The US Dow Jones Industrial Average gained 0.72% in the previous session.