Indian shares ended lower on Tuesday after the country's jets conducted air strikes against a militant camp in Pakistan territory, escalating tensions between the two nuclear-armed neighbours.
Meanwhile, Pakistan's top civilian and military leaders rejected Indian comments that it had struck "terror camps" inside Pakistan, vowing to prove wrong India's claims and warning that it will retaliate to Indian aggression.
"Despite fears of escalation in geo-political tensions, market recouped some losses and stayed rangebound for further cues from both countries," said Vinod Nair, head of research, Geojit Financial Services.
"Market movement is likely to be cautious until further clarity over cross-border threat."
The broader NSE Nifty closed 0.41 percent lower at 10,835.30, while the benchmark BSE Sensex fell 0.66 percent to 35,973.71.
Financials continued their downward spiral, accounting for over two-thirds of the losses on the NSE index. Housing Development Finance Corp Ltd was the top drag with a decline of 2.2 percent, while ICICI Bank Ltd closed down over 2 percent.