New Delhi - India's benchmark Sensex stock index recovered from early losses Tuesday after market regulator the Securities and Exchange Board of India assured that the US financial crisis will not affect domestic bourses.

The 30-share-sensitive index plunged by 442.20 points soon after opening to a near two-year low of 12,153.33 - a loss of 3.5 per cent -amid heavy selling in stocks of banking, metal, realty and IT sectors.

The Sensex later pared its losses and was trading at 12,612.28, up 0.13 per cent, at 12:15 pm (0645 GMT).

The broader S&P CNX Nifty index of the National Stock Exchange also recovered and was trading at 3,846.10, down 0.10 per cent, around the same time.

The recovery came after SEBI Chairman CB Bhave said Indian equities markets were resilient and there was no need for panic.

"The clearing system is capable of dealing with stock fluctuations and markets are under watch," he told reporters in New Delhi.

Bhave, who met Finance Minister P Chidambaram to assess the market situation, said SEBI was monitoring the situation closely and there was no need for unwarranted worry.

Meanwhile, India's second-largest bank, ICICI, stated that rumours about the instability of the bank were "malicious." CEO KV Kamath said the bank was profitable and financially sound. (dpa)