Market benchmark Sensex fell over 555 points after the Indian army on 29 September announced that it conducted 8 surgical strikes on terror launch pads at the Line of Control (LoC).
Nifty went down about 170 pts in noon trade after reports of surgical strikes against Pakistan. About 1718 shares declined against 734 advancing shares on the BSE.
The Director General Military Operations (DGMO), Lt Gen Ranbir Singh, said in a press briefing that India conducted surgical strikes last night across the LoC to "safeguard our nation".
The DGMO added that "the operation has now ended".
Security forces acted after intelligence inputs about terrorists preparing to launch strikes against India.
Pakistan Prime Minister Nawaz Sharif condemned the attack saying their desire for peace should not be interpreted as their weakness.
Earlier in the day, Sensex surged over 181 points and the NSE Nifty reclaimed the 8,800-mark today after global markets cheered a surprise deal by OPEC to cut oil production for the first time in eight years.
Short-covering of bets with today being the last session of September expiry in the derivatives segment kept the momentum on.
The 30-share index, which had gained 69.11 points in the previous session, rallied by 181.31 points, or 0.64 per cent, at 28,474.12.
Oil and gas, realty, PSU, auto and metal stocks were in a sweet spot, which gave the sentiment a lift.
The NSE index Nifty was also trading higher 55.50 points, or 0.63%, at 8,800.65.
--With PTI inputs