ended 151.36 points higher, up 0.2%, at 82,055, while the NSE Nifty 50 went up 72.45 points, or 0.3%, to settle at 25,044.

"The markets are expected to continue reacting sharply to developments emerging from the Iran-Israel conflict," said Umeshkumar Mehta, CIO, Samco Mutual Fund. "What we witnessed in the domestic market today was not an outlier. Such knee-jerk reactions are likely to persist until there is greater clarity on the trajectory of the conflict."

The market breadth remained stronger, with 2,662 advancing and 1,339 declining out of the total 4,144 traded on BSE. Both the Nifty Midcap 150 Index and Nifty Smallcap 250 rose 0.7%.

The Volatility Index or VIX - the market's fear gauge - ended 2.9% lower at 13.6 points. Elsewhere in Asia, China gained 1.2%, Hong Kong jumped 2.1%, South Korea moved up 3%, Taiwan advanced 2.1% and Indonesia rose 1.2%. Oil prices fell further on Tuesday, hitting a two-week low, as concerns over potential supply disruptions in the Middle East eased. Brent crude dropped $2.48, or 3.5%, to $69 a barrel.Analysts are advising investors to tone down optimism. "Let domestic liquidity guide your short-term moves. Stay selective, deploy gradually and pare down weak or leveraged bets as we near 26,000," said Shrikant Chouhan, executive vice president at Kotak Securities.Foreign portfolio investors (FPIs) remained net sellers, selling shares worth ₹5,266 crore on Tuesday, BSE data showed. Domestic institutional investors (DIIs) remained net buyers, buying shares worth ₹5,209 crore.