The Sensex jumped 461.42 points or 1.35 per cent to end at 34,760.89.
Led by the sharp rally in stocks, the market capitalisation of BSE-listed companies zoomed Rs 3 trillion to Rs 1 trillion
The Sensex had lost nearly 175 points Tuesday.
"Market turned positive from over sold region led by financial stocks and marginal gain in the rupee," said Vinod Nair, Head of Research, Geojit Financial Services.
Rupee recovery from record lows also boosted market sentiment.
The rupee recovered by 34 paise to 74.05 (intra-day) against the dollar at the forex market Wednesday.
At BSE, 2,058 stocks advanced, while 611 declined and 131 remained unchanged.