The Sensex recorded its first fall in five weeks amid a day marked by high volatility. The bourse eventually gained 49 points to close at 31,262.06
Indian bourses largely defended world pressure in the midst of an unexpected outcome for UK Prime Minister Theresa May's Conservatives with political uncertainty taking centre stage globally.
Though the Conservative party managed to get a minor win, which guarantees they are set to be the largest party in the UK Parliament, but fell well short of a majority.
The early sell-off was triggered by rumours that IT bellwether Infosys' promoters were planning to sell their stakes, dragging the stocks to hit their lowest-level in over a month.
Infosys Ltd ended down 0.80 per cent, after falling as much as 3.5 per cent earlier. "The market bounced back after a subdued momentum during the day as the verdict of UK election has not created any impact in the EMs. On the other hand, Investors are a bitcautious given the market's strong performance in the last one year compared to the tepid results.
Some are under profit-booking mode and waiting for some correction to come back to the market. Also, investors are shifting their focus to the week ahead, FEDs policy decisionto get cues on rate hike trajectory." Vinod Nair, Head of Research, Geojit Financial Services Ltd said.
A sharp rebound in European markets, which showed a muted reaction to the UK elections that resulted in a hung Parliament also supported the recovery momentum.
Brisk buying was seen across sectors such as realty, metal, auto, banking and healthcare amid a firming trend in global markets.
Furthermore, covering-up of short positions by bears too supported the late recovery in stocks, helping wipe off initial losses.
The 30-share index started on a bearish note at 31,196.86 stayed in the negative terrain for most part of the day to hit a low of 31,087.28 as participants indulged in trimming their positions to lock in gains.
However, late buying helped it stage a strong comeback to wipe off the day's losses to scale a high of 31,289.99 before ending 48.70 points, or 0.16 per cent, higher at 31,262.06.
The gauge had lost 57.92 points in the previous session. The NSE Nifty also went up by 21 points, or 0.22 percent, at 9,668.25, after moving between 9,608.15 and 9,676.25. BSE sectoral indices led by realty, metal, auto, banking, the smallhealthcare and capital goods led the recovery, rising up to 2.60 per cent. Both the BSE and NSE indices recorded their first weekly fall in five weeks by losing 11.23 points, or 0.03 per cent and 14.75 points, or 0.15 per cent. The broader market outperformed the key indicthe small-cap index rising 0.50 per cent and the mid-cap index rose 0.28 per cent.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 90.78 crore, while domestic institutional investors(DIIs) had also bought shares worth a net Rs 738.78 crore as per provisional data.
Globally, in the Asian region, Japan's Nikkei was up 0.52per cent and Shanghai Composite Index rose 0.26 per cent,while Hong Kong's Hang Seng was down 0.13 per cent. Markets in Germany, France and UK were up in their earlydeals.