Markets erased sharp losses suffered in early trade with the benchmark Sensex trading higher by 65 points in pre-close session on emergence of buying support.
The 30-share index had plunged to below 16,000 points level by losing over 320 points minutes after the Reserve Bank announced a hike of 75 basis points in cash reserve ratio.
The BSE barometer later rebounded to trade higher by 64.81 points at 16,371.68 points at 1500 hrs.
Meanwhile, the wide-based National Stock Exchange index Nifty rose by 9.50 points to 4,876.75 points. Earlier, it had dipped below 4,800 points level.
The upsurge was supported by buying in banking, realty and capital goods stocks, brokers said.