Benchmark indices Sensex and Nifty ended marginally higher on Monday after facing sharp losses in intraday trade, supported by value buying in IT and select blue-chip counters.
However, a weak rupee against the US dollar and rising global crude prices amid escalated tensions in West Asia capped the gains, traders said.
In an extremely volatile trade, the 30-share BSE Sensex increased by 77.05 points, or 0.10 per cent, to settle at 75,315.04. During the day, it tanked 1,134.78 points, or 1.50 per cent, to 74,180.26.
A total of 3,034 stocks declined while 1,264 advanced and 194 remained unchanged on the BSE.
The 50-share NSE Nifty edged higher by 6.45 points, or 0.03 per cent, to end at 23,649.95.
"...market sentiment witnessed a mild recovery from intraday lows but remained largely weak due to a mix of global and domestic pressures. The rebound was primarily supported by value buying at lower levels along with selective strength in IT and pharma stocks, which helped the indices trim part of their losses.
"However, the upside remained limited as rising crude oil prices, continued weakness in the rupee near record lows, and sustained FII outflows continued to weigh on the market," Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
From the Sensex firms, Tech Mahindra, Infosys, Bharti Airtel, Bajaj Finserv, Sun Pharma, HCL Tech, Bajaj Finance and Tata Consultancy Services were among the major winners.
In contrast, Tata Steel, Power Grid, State Bank of India and NTPC were major laggards.
The BSE MidCap Select index climbed 0.17 per cent, while the SmallCap Select index dropped 1.62 per cent.
Among the sectoral indices, BSE Focused IT jumped 2.53 per cent, IT (1.95 per cent), Healthcare (0.22 per cent) and Telecommunication (0.05 per cent).
PSU Bank declined 1.81 per cent, Auto dropped 1.74 per cent, Consumer Discretionary (1.26 per cent), Metal (1.13 per cent), Consumer Durables (1.05 per cent) and Oil & Gas (1.01 per cent).
"Markets witnessed a volatile session on Monday, with benchmark indices ending almost unchanged amid weak global cues and persistent macroeconomic concerns. The Nifty opened gap-down and remained under pressure during the first half of the session; however, a rebound in select heavyweight counters helped trim losses as the day progressed.
"The weakness was primarily driven by escalating geopolitical tensions in the Middle East after renewed hostilities between the US and Iran intensified concerns over global energy supplies. Brent crude surged above the USD 110 per barrel mark, fuelling fears over inflation, India’s current account position, and margin pressure across crude-sensitive sectors," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.
Brent crude, the global oil benchmark, traded 0.73 per cent higher at USD 110.1 per barrel.
"The Indian rupee extended its losing streak for the seventh straight session...driven by rising geopolitical tensions pushing crude oil prices higher. Additionally, a sharp uptick in both global and domestic bond yields signalled expectations of a prolonged high-interest-rate environment. Concerns over a widening trade deficit and declining forex reserves further added to the pressure on the currency," Nandish Shah - Deputy Vice President, HDFC Securities, said.
The rupee weakened further and closed at a record low of 96.35 (provisional) against the US dollar on Monday.
In Asian markets, Japan's benchmark Nikkei, Shanghai's SSE Composite index and Hong Kong's Hang Seng ended lower, while South Korea's benchmark Kospi settled in positive territory.
Markets in Europe were trading on a mixed note.
US markets ended over 1 per cent lower on Friday.
Foreign Institutional Investors (FIIs) bought equities worth Rs 1,329.17 crore on Friday, according to exchange data.
In the previous session on Friday, the Sensex dropped 160.73 points, or 0.21 per cent, to settle at 75,237.99. The Nifty settled lower by 46.10 points, or 0.19 per cent, at 23,643.50, snapping its two-day gaining streak.