The Bombay Stock Exchange benchmark Sensex on Wednesday ended 49 points lower, but far better from the day's low, as trading sentiment was clouded by fears that Greece's debt woes might spread to other euro zone countries.
London's benchmark FTSE 100, Paris CAC 40, Frankfurt, Athens and Madrid slid after Spain's economy minister said the country's financial markets were "complicated."
The 30-share BSE Sensex opened 279 points lower below 17,000 level following overnight losses in the US markets, but arrested the fall after buying interest from domestic funds. It closed 49.18 points down at 17,087.96.
Similarly, the wide-based National Stock Exchange index Nifty, which had dipped below 5,100 points level during the day, bounced back to close lower by 23.60 points to 5,124.90.
Brokers said the initial selling was purely in panic after an overnight plunge in the US markets concerned over doubts the sovereign debt crisis spreading beyond Greece.
Although Greece has secured a Euro 110 billion bailout from EU-IMF, many fear the efficacy of the package to rescue the heavily indebted nation.
They said a recovery move in the opening session in the European bourses and entering of domestic funds for the market rescue, wiped off some of the initial losses.
With the sudden change in overseas trend this afternoon, the second most heaviest on the Sensex and major software exporter to the US Markets - Infosys Technologies rose to lend support to the weakening market.
Of the 30-BSE index components, 15 stocks closed with losses and 15 others recorded small to notable gains.
The market was partially shadowed by a weakening trend in the Asian region following a fall in Hong Kong and Singapore while Japan was closed for holiday.