The Iranian attack on two United States bases in Iraq took investors by surprise and sent markets diving in early trading, but they managed to stage a recovery by the close.
Iran's subsequent statement that it does not seek escalation or war with the US but will defend itself against aggression took some of the heat out of the issue and lifted the mood among traders.
AxiTrader chief Asia market strategist Stephen Innes noted that equity markets across the region reversed the effects of the early knee-jerk reaction mainly due to the lack of an immediate US retaliation.
The local benchmark Straits Times Index (STI) fell by as much as 1.3 per cent shortly after trading commenced, before recouping most of those losses as fears eased to end the session at 3,245.89, down 1.97 points, or 0.06 per cent.
A dealer said orders came flowing in on the opportunity to buy on the dip: "Pockets of opportunities for bargain hunting were appearing."
Trading volume was at 2.12 billion securities worth $1.71 billion, with losers besting gainers 295 to 151.
Yangzijiang Shipbuilding was the STI's most actively traded counter - the stock fell 2.5 per cent to $1.16, with 47.4 million shares changing hands.
After the post-opening sell-off, the local lenders ended up mixed.
DBS Bank dropped 1.2 per cent to $25.73 but the other two fared better: OCBC Bank edged up 0.1 per cent to $11.01 while United Overseas Bank put on 0.1 per cent to $26.72.
With gold cracking US$1,600 an ounce during the session, plays related to the yellow metal continued to garner interest.
CNMC Goldmine added 1.8 per cent to 28.5 cents, with 5.6 million shares traded.
Singapore-listed SPDR Gold Shares ETF, a gold-backed exchange-traded fund, gained 1.1 per cent to US$149.03.
Elsewhere, Australia, China, Japan, Hong Kong, Malaysia, South Korea and Taiwan ended in the red, but, like the local benchmark, they clawed back early losses.
Australia's benchmark ASX 200, with its wealth of energy and mining stocks, fared the best among the group, dipping just 0.1 per cent.
Even though sentiment has since improved, some degree of uncertainty remains.
Mr Innes said: "Let (yesterday's) escalation remind everyone that there is no free lunch and, indeed, never a one-way street when it comes to risk. Stocks tanked, yields plummeted, gold rallied shortly afterwards."