However, Zee Entertainment jumped by 4.9 per cent to Rs 298 per share while Grasim moved up by 2.6 per cent. IT majors Tata Consultancy Services, HCL Technologies and Infosys witnessed marginal gains.

Zee Entertainment dropped by 3.4 per cent after the company posted 38 per cent drop in consolidated net profit during the third quarter (October to December) to Rs 349 crore from Rs 562 crore in the same period last year. Coal India, ONGC, Power Grid Corporation and NTPC witnessed losses between 2.7 and 3.2 per cent.

IndianOil Corporation fell by 4.08 per cent while index heavyweight Reliance Industries dropped by 3.09 per cent to Rs 1,532.20 per share. The other prominent losers were Coal India, NTPC, Tata Consultancy Services, Adani Ports, Axis Bank and Bajaj Finance.

Asian shares traded higher as Wall Street extended its run of record peaks on solid US economic data. But prices jumped as oilfields in southwest Libya began shutting down after forces loyal to Khalifa Haftar closed a pipeline, potentially reducing national output to a fraction of its normal level.

Among stocks, Yes Bank added gains of 1.76 per cent at Rs 40.45 per share while Kotak Mahindra Bank moved up by 1.1 per cent and ICICI Bank by 0.6 per cent.

Banking and metal stocks were the worst sufferers. IndusInd Bank lowered by 4.13 per cent to Rs 1,420.40 per share after reporting deteriorating asset quality in third quarter results a day earlier despite 33 per cent jump in net profit.

Wipro gained by 1.4 per cent while HCL Technologies was up by 1.3 per cent. Sun Pharma, Cipla and Dr Reddy's ticked up by 2 per cent, 1.2 per cent and 1 per cent respectively. The other prominent winners were Britannia, Hindustan Lever and Kotak Mahindra Bank.

The BSE S&P Sensex closed 634 points or 1.55 per cent higher at 41,451 while the Nifty 50 moved up by 188 points at 12,214.

Besides, the GDP growth has been forecast to dip to an 11-year low of 5 per cent in the current financial year, mainly due to poor performance by the manufacturing and construction sectors.

Shares had fallen sharply on Monday as Iran and the United States traded threats after a US airstrike killed a top Iranian commander. The mood calmed a little as the session passed with no new aggression.