The markets eventually ended on a flat note, as hopes of Greek bailout appeared to be in balance ahead of the vote of confidence of the Greece Prime Minister.
The Sensex after a gap-down opening had sprung back to life after the French President Nicolas Sarkozy reassured hopes of a Greek bailout.
According to reports, the French President admitted that the world had been taken by surprise by Greece and the decision by Prime Minister Papandreou to hold a referendum, but he insisted that despite the vote announcement, Greece must continue with the bailout plan.
However, investors remained jittery given the uncertainty ahead of the major events to unfold as a result of which the afternoon gains were wiped off.
The Sensex from a low of 17,338, had rallied to a high of 17,616 - an intra-day gain of 278 points.
However the BSE benchmark index eventually ended with a marginal loss of 16 points at 17,465. The NSE Nifty was virtually unchanged at 5,258.
The European markets, too, which started the day on a positive note, were seen trading in the negative terrain around 1600 hours.
The FTSE-100 was down 22 points at 5,400.
The DAX and CAC were more or less after, despite registering a gain of over 1.5 per cent each in opening deals.
Back home, Reliance was the major mover. The stock ended with a gain of 1.3% at Rs 871, and contributed 24 points to the index. Tata Power and Jindal Steel were the other notable gainers.
On the other hand, Hero MotoCorp dropped nearly 3% to Rs 2,081. Bharti Airtel plunged over 2.5% to Rs 384. NTPC, BHEL, Coal India and ICICI Bank were the other major losers.
In the broader markets, Allahabad Bank zoomed 8% to Rs 161 after reporting 21% jump in Q2 net profit.
The banks September 2011 quarter net jumped to Rs 488 crore as against Rs 403 crore in the corresponding quarter a year ago.
Reliance Communications and Tech Mahindra rallied 5.5% each. Crisil, Reliance Power, Chambal Fertiliser, Emami, Thermax and Gujarat Gas were the other major gainers.
Jain Irrigation shed 4.5% at Rs 117 and was the top loser among the BSE A-group stocks. Punjab National Bank, Marico, United Spirits, EIH, ABB and Cummins India were the other major losers.
Debutant Indo Thai, which ended at a steep 69 per cent discount at Rs 23, topped the value chart with a turnover of Rs 228.66 core. It was followed by SBI (Rs 79.41 crore), Tata Motors (Rs 79.37 crore), Reliance (Rs 59.43 crore) and ICICI Bank (Rs 52.42 crore).
Indo Thai also led the volume charts with trades of over 37.36 million shares on the BSE followed by Shree Ashtavinayaka (18.18 million), SpiceJet (8.54 million), Nu Tek India (7.50 million) and GVK Power (4.78 million).
The market breadth turned negative towards the close, 1,434 stocks declined, while 1,395 stocks advanced on the BSE on Wednesday.