The BSE benchmark Sensex plummeted about 383 points to close at 57,300-level on Tuesday, tracking massive selloffs in global markets.
After sinking about 1,300 points in early deals, the Sensex staged a sharp recovery but still ended 382.91 points or 0.66% lower at 57,300.68.
The NSE Nifty too reclaimed part of its early losses before closing 114.45 points or 0.67% lower at 17,092.20.
On the Sensex chart, Tata Steel, TCS and SBI fell the most, losing as much as 3.64 per cent. Of the 30 Sensex constituents, 20 closed in the red.
"Escalations in Ukraine tensions with Russia recognising two pro-Russian rebel regions have aggravated the crisis. The economic consequences are already visible in higher crude and gold prices," V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
The biggest macro headwind for India is crude racing to $97 a barrel, he said adding that the inflationary consequence of this will force the RBI to abandon its dovish monetary stance.
Continuing their selling spree, foreign institutional investors sold shares worth ₹2,261.90 crore in the Indian capital market on Monday, exchange data showed.
Other Asian bourses on Tuesday followed Wall Street rout and massive selloffs in European equities triggered by the Russia-Ukraine standoff.
In a sign of aggravating geopolitical crisis in the eastern Europe, Russian President Vladimir Putin has recognised the independence of separatist regions in eastern Ukraine.
Mr. Putin's announcement comes after a meeting of the presidential Security Council and paves the way for Russia to openly send troops and weapons to the long-running conflict pitting Ukrainian forces against Moscow-backed rebels.
Meanwhile, India has also expressed deep concerns over the escalation of tension along the Russia-Ukraine border and said the developments have the potential to undermine peace and security of the region.
Tracking the Ukraine crisis, Brent crude futures rose 4% to $97.35, the highest since September 2014.
