Recovering over 5,380 points from its intra-day low of 29,388.97, the BSE sensex ended 1,325.34 points or 4.04 per cent higher at 34,103.48.
Trading was halted for 45 minutes in early session after the index hit its lower circuit limit.
The mayhem on Dalal Street had eroded investor wealth worth Rs 12,92,479.88 crore, taking the total m-cap to Rs 1,12,78,172.75 crore on the BSE in early trade.
However, as stocks pared the losses, investor wealth grew by Rs 3,55,590.19 crore, taking the total market capitalisation of BSE-listed companies to Rs 1,29,26,242.82 crore at the end of the session.
The m-cap of BSE-listed companies stood at Rs 1,25,70,652.63 crore on Thursday.
On the BSE, as many as 1,193 scrips declined, while 1,191 advanced and 164 remained unchanged.
Volatility heightened in global markets as benchmarks world over went into panic mode on fears of the coronavirus pandemic triggering a recession.
Domestic investors, however, began bargain hunting at beaten-down valuations, leading benchmarks in the positive territory.
Concerns over the economic impact of Covid-19 is expected to keep markets highly volatile in the near term, analysts said.
More than 1,30,000 cases of the novel coronavirus have been recorded in 116 countries and territories, killing at least 4,900 people.
The number of coronavirus patients in India has risen to 75, as per the health ministry.