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Indian shares rose more than 1% on Tuesday as investors looked past concerns surrounding the Omicron coronavirus variant, with metal and banking stocks leading the recovery from last session’s sell-off.

By 0505 GMT, the blue-chip NSE Nifty 50 index (.NSEI) and the benchmark S&P BSE Sensex (.BSESN) both had risen 1.16% to 17,108 and 57,405.77, respectively. Both indexes fell more than 1.5% on Monday to their lowest close since Aug. 27.

“Broadly, we believe more consolidation is possible in the Indian and U.S. markets. Omicron is only causing mild impacts currently but since it is spreading fast it could lead to more travel restrictions,” said Amit Gupta, fund manager, portfolio management services, ICICI Securities.

“If there are studies which suggest that this variant will not be as bad as Delta, the market will definitely take it very positively.”

Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN on Monday that it does not look like Omicron has a “great degree of severity.”

The Nifty metal index (.NIFTYMET) jumped 2.1% after two straight sessions of falls, with Tata Steel (TISC.NS) and state-run Steel Authority of India Ltd (SAIL.NS) rising 2.3% and 2.9%, respectively.

Industrial metals have a clear demand-supply mismatch and with China looking at climate change, a lower production level is quite possible, which could benefit India, Gupta said.

The Nifty bank index (.NSE BANK) gained about 2%, driven by a 3.3% jump in Kotak Mahindra Bank (KTKM.NS) and a 2.6% rise in Axis Bank (AXBK.NS) after a report said the two private-sector lenders had emerged as top contenders to acquire Citi India’s retail assets.

Meanwhile, market participants await the Reserve Bank of India’s policy decision due on Wednesday, where the central bank is expected to hold rates.

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India today

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