Last ditch Greek debt negotiations broke down over the weekend, leaving the country closer to default ahead of a looming deadline for a repayment to the IMF on Tuesday and unexpected call for a referendum on terms proposed by lenders for extending the country's bailout.
Indian markets initially responded dramatically to the developments and kept on descending as panic investors resorted to heavy selling fearing that the Greek crisis may trigger capital outflows.
However, after the earlier onslaught and massive slide, markets staged a remarkable turnaround towards the tail-end session following hectic short-covering and low level value buying in frontline stocks, limited the fall.
Positive comments from the officials that the government is in touch with the RBI to take necessary steps to deal with the Greek crisis, in line with other global economies, helped to calm market nerves to some extent.
The 50-share barometer slumped by 62.70 points, or 0.75 per cent, to close at 8,318.40 after hitting a low of 8,195.65 in early trade.
It was followed by realty (2.01 per cent), media (1.64 per cent), metal (1.56 per cent), auto (1.45 per cent), healthcare (1.16 per cent) and banking (0.71 per cent).
Mid-cap and small-cap tumbled 1.82 and 2.04 per cent, respectively.
Major laggards in the Nifty included Infosys, Tech Mahindra, SBI, Tata Motors, Reliance, Sun Pharma, HCL, HDFC Bank, Maruti, M&M, ONGC, Idea, Asian Paints, Hindalco, Yes Bank, Kotak Bank, Bharti Airtel, Axis Bank, Wipro and HDFC.
Notable gainers in the falling market were ITC, HUL, PNB, BPCL and NTPC.
A total of 7,770.34 lakh shares changed hands in 66,28,970 trades and the total market capitalisation of NSE stood at Rs 97,62,895 crore.