The benchmark S&P BSE Sensex recovered moderately by 54 points to end at 26,425.30 on short-coverings by operators ahead of announcement of key macro economic data later on Friday.
The government will release data on industrial production (IIP) for April as also consumer price index-based inflation for May later in the day.
The 30-share barometer resumed weak and touched a low of 26,307.07 before recovering to settle at 26,425.30, a net gain of 54.32 points or 0.21%.
On Thursday, it had tumbled 469.52 points, or 1.75%, on sustained capital outflows on some local negative factors.
The market is also looking for the next triggers to decide on its future course of action, including the progress of monsoon and June earnings by key companies.
Besides, indication of bleak chances of rate cut by the RBI going ahead, put pressure on the market.
Meanwhile, the broader NSE CNX Nifty also rose by 17.55 points, or 0.22%, at 7,982.90.
Among top heavyweights, Reliance Industries (RIL) notched up handsome gains of 1.36% after its Chairman Mukesh Ambani today said the company will re-enter the telecom services space through Reliance Jio with a Rs 4,000 smartphone by December, offering voice and data services for as low as Rs 300-Rs 500 per month.
Reliance Jio Infocomm will commercially launch 4G services by December.
Banking, power, refinery and auto stocks attracted good buying interest while shares from IT, tech, metal and consumer durable sectors registered losses.
IT stocks declined the most on reports that the US Department of Labour has opened probe against two Indian companies, TCS and Infosys, for H1-B visa violations.
Asian stocks ended mixed as indices in China, Hong Kong, Japan and Singapore firmed up by 0.12% to 1.39% while indices in South Korea and Taiwan eased by 0.01% to 0.22%.
European markets were also trading narrowly mixed after the International Monetary Fund walked out on Greece's bailout talks, increasing the risk of a Greek default and exit from the Eurozone.