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In the Sensex kitty, Ultratech Cement was the top gainer, rising 2.10 per cent, followed by HDFC Bank, Reliance Industries Sun Pharma, NTPC and Asian Paints.
The BSE benchmark Sensex recovered by 192.84 points and the NSE Nifty reclaimed the 12,000 level on Tuesday as no fresh aggressive moves from the US and Iran helped crude prices ease.
After rallying 553.51 points during the session, the 30-share BSE index ended 192.84 points, or 0.47 per cent, higher at 40,869.47.
Similarly, the broader Nifty rose 59.90 points, or 0.50 per cent, to finish at 12,052.95.
In the Sensex kitty, Ultratech Cement was the top gainer, rising 2.10 per cent, followed by HDFC Bank, Reliance Industries Sun Pharma, NTPC and Asian Paints.
On the other hand, Infosys, ICICI Bank, Bharti Airtel, Nestle India, Hero MotoCorp and PowerGrid ended in the red.
According to traders, domestic investors followed global stocks that rebounded after a day of no escalation in the US-Iran tussle.
The Pentagon on Monday distanced itself from US President Donald Trump's assertions that he would bomb Iranian cultural sites despite international prohibitions on such attacks.
Iran's parliament, meanwhile, passed a bill on Tuesday designating all US forces "terrorists" over the killing of a top Iranian military commander in a US strike last week.
Brent crude oil futures slipped nearly 0.26 per cent to $68.73.
Edited by Nandita Mallik