The BSE benchmark Sensex ended 52 points lower on Wednesday as the US-Iran clash kept global investors on the edge.
After plunging nearly 400 points during the session, the 30-share BSE index pared some losses to settle 51.73 points, or 0.13 per cent, down at 40,817.74.
Similarly, the broader Nifty fell 27.60 points, or 0.23 per cent, to finish at 12,025.35.
Among Sensex stocks, L&T was the top loser, shedding 2.19 per cent, followed by ONGC, Titan, Sun Pharma, Hero MotoCorp and Infosys.
On the other hand, Bharti Airtel, TCS, Ultratech Cement, Bajaj Finance and ICICI Bank spurted up to 2.74 per cent.
According to analysts, domestic stocks followed global equities that plunged on increasing tensions in the Middle Est after Iran launched missiles targeting US military bases in Iraq in retaliation for the killing of Iran's top general Qasem Soleimani.
Brent crude oil futures rose nearly 0.62 per cent to USD 68.67 per barrel.
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The rupee, which skidded 20 paise in opening deals, recovered to trade 3 paise up at 71.78 per US dollar (intra-day).
Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended up to 1.57 per cent lower.
European markets too started on a negative note.
On the domestic front, advance GDP estimates suggesting India's economic growth may drop to an 11-year low of 5 per cent in the current fiscal also kept domestic investors cautious, traders said.