The benchmark BSE Sensex rebounded over 96 points to 25,706.87 in early trade on Monday, reversing its two-day losing trend on the back of positive IIP numbers for July.
A firming trend at other Asian markets also buoyed sentiment.
The 30-share barometer recovered 96.66 points, or 0.38%, to 25,706.87, with stocks of realty, power, capital goods and PSU sectors leading the recovery. The gauge had lost 109.37 points in the previous two straight sessions.
The NSE index Nifty recaptured the 7,800-level by recovering 21.80 points, or 0.27%, at 7,811.10.
Brokers said buying activity picked up on positive economic data as industrial production expanded at better-than-estimated 4.2% in July this year compared to the same month last year as manufacturing activity and offtake of capital goods improved.
Among other Asian markets, Hong Kong's Hang Seng was up 0.81% while Japan's Nikkei was trading 0.42% higher in early trade. China's Shanghai Composite index rose 0.65%.
The US Dow Jones Industrial Average had closed 0.63% higher on Friday.