Snapping a three-day losing streak, the benchmark BSE Sensex on Thursday recovered from over one-year lows by surging 311.22 points to 25,764.78 on value-buying in recently beaten-down stocks amid rebound in global markets.
Positive US equities overnight also boosted sentiment.
In the last three days, the barometer index had plunged by more than 930 points on worries over economic slowdown in China and its impact on world growth.
On Wednesday, the index had closed at 25,453.56 points -- its lowest level since August 8, 2014.
China markets closed for a long weekend also helped in calming jittery global markets.
Consequently, all the domestic sectoral indices were in the green with gains up to 4.55%.
The BSE 30-share Sensex after resuming higher at 25,614.69 improved further to day's high of 25,835.41 before falling to a low of 25,555.77. It finally closed at 25,764.78, a rise of 311.22 points or 1.22%.
Among 30-Sensex constituents, 27 shares ended higher.
The broad-based NSE Nifty, reclaimed the 7,800- mark by rising 106.00 points or 1.37% to close at 7,823. Intra-day, it touched a high of 7,845.60 and low of 7,754.05.
In tandem with overall trend, mid- and small-cap indices too ended in positive zone, gaining up to 1.18%.
Sentiment also got a boost after CBDT Thursday issued a circular asking its fields officers to keep in abeyance pending assessments and not to recover any outstanding.
Anand James, co-head of technical research desk, Geojit BNP Paribas said, "Though investors had more or less priced in the government's take on retrospective ruling on MAT, the positive vibes helped to stem this week's falls."
Among Sensex constituents, Tata Steel gained the most by surging 4.55%, followed by Vedanta 4.42% as metal prices recovered in global markets.
Shares of realty firm DLF extended its yesterday's run-up by rising by 10.08% to Rs 120.65 after it sold about 50% stake each in two upcoming projects in New Delhi to Singapore's sovereign wealth fund GIC for Rs 1,990 crore.
Asian stocks closed higher with Japan's Nikkei ending 0.48% higher, while Chinese and Hong Kong markets remained closed for a public holiday. European markets were too higher in late morning deals.