Benchmark indices had a volatile session, however late hour recovery allowed the Nifty to defend the 7,700 level.
Markets witnessed consolidation as investors sought to book profits at attractive valuations ahead of the extended weekend.
Further, geopolitical concerns following the deadly terror attacks in Brussels on Tuesday limit gains.
The S&P BSE Sensex was up 7 points to close at 25,338 and the Nifty50 gained 2 points to end at 7,717.
Indian markets will be closed on Thursday and Friday on account of Holi and Good Friday, respectively.
“After extreme volatility for the second day, the markets have managed to sustain their critical psychological supports, such as 7,700 on Nifty.
"A mix of large cap and mid cap stocks have broken out of their three month downtrend and now indicating that a major bottom could be in place for a lot of such stocks.
"Since this is a short week, and expiry week for March contracts is scheduled for the next week, I believe that the market mood would depend completely on any global market news or events.
"Technically, supports are placed at 7,550 and resistance would continue to be in the range of 7,750-7,800,” said Kunal Bothra, Head- Advisory, LKP Securities.
Meanwhile, foreign institutional investors continued to remain buyers in Indian equities with net purchases of Rs 1,095 crore on Tuesday, as per provisional stock exchange data.
Overseas, all Asian equities barring China settled lower following the terror attack in Brussels which dampened investor sentiment.
Nikkei, Hang Seng, and Straits Times closed lower by 0.2%-0.4% each.
Shanghai Composite was up 0.4%.
Metal shares gained across the board following signs of revival in China's housing market and supply cuts by firms like Glencore and Freeport McMoRan which is likely to lift the copper prices higher, according to media sources.
Hindalco Industries, Bhushan Steel, Steel Authority of India (SAIL), Vedanta, Jindal Steel & Power and National Aluminium Company closed higher up to 5%.
Telecom shares rose in an otherwise weak market amid reports that Reliance Jio may delay its launch of 4G service while Moody's report on the Bharti-Videocon deal also boosted sentiment.
Bharti Airtel, Idea Cellular and Reliance Communications gained up to 2%.
Weakness in global crude oil prices weighed on oil explorers. ONGC, Cairn India and Oil India were down 0.6%-1.5% each.
Index heavyweight Reliance Industries is down nearly 2%. Reliance Jio might delay the launch of its much-awaited mobile broadband service (4G) to the end of this year.
Shares of aviation companies climbed on back of heavy volumes in an otherwise weak market.
Declining crude prices, the sharper focus by the government, higher disposable incomes, and the cost-benefit advantage over the Railways are some of the key factors in the turnaround of the aviation sector. Jet Airways, SpiceJet and IndiGo surged up to 9%.
Mahindra & Mahindra announced its entry in the branded dairy products business on Tuesday.
The stock finished session with marginal losses.
Maruti Suzuki has received 20,000 bookings within the launch of compact SUV Vitara Brezza.
It plans to start delivering the new model to customers from March 25. The stock was up nearly 1%.
Profit taking was seen in financials after recent gains on hopes of a rate by the central bank.
Meanwhile, according to Standard and Poor reports, the asset quality is likely to remain under pressure due to tepid domestic industrial activity, and subdued profitability and high leverage in some corporate sectors.
HDFC, HDFC Bank, ICICI Bank, Axis Bank and SBI were down 0.5%-1% each.
Ashok Leyland has tied up with Lockheed Martin to develop combat vehicles for Indian Army. The stock rose nearly 2%.
Shares of PNC Infratech were up over 3% after the company said that it has commissioned the Raebareli-Jaunpur BOT project 3 months ahead of schedule.
Kalpataru Power Transmission has rallied 6% after the company announced that it has secured orders worth Rs 1,320 crore from Power Grid Corporation.