Indian shares closed lower on Wednesday as investors stayed away from risky assets, weighed down by elevated oil prices after Iran attacked US-led forces in Iraq and sparked fears of supply disruptions.

The indexes, however, cut some losses after falling as much as 1% each earlier in the session. The Nifty 50 ended 0.23% lower at 12,025.35, while the benchmark S&P BSE Sensex closed down 0.13 % at 40,817.74.

Iran launched missiles at US-led forces in Iraq early on Wednesday, retaliating for the US drone strike on an Iranian commander whose killing last week stoked fears of a new Middle East war.

Bharti Airtel Ltd led the gains on the blue chip Nifty 50 index, closing 3.1% higher, while Eicher Motors Ltd was the biggest loser, ending 4.38% lower.

Coal India Ltd shares, the second biggest loser on Nifty, also hit a record low after the government eased mining laws in a bid to attract foreign players to the domestic coal sector and reduce imports of the fuel.