Indian shares rise for third day as Omicron worries recede

Indian shares closed higher on Thursday, led by gains in information technology and energy stocks on improved investor sentiment after a study showed risk from Omicron was lower compared with the Delta coronavirus variant, Reuters reported.

The NSE Nifty 50 index ended 0.69% higher at 17,072.60 and the benchmark S&P BSE Sensex gained 0.68% to 57,315.28.

Two vaccine manufacturers said their shots offered protection against Omicron, as UK data suggested it may cause proportionally fewer hospitalizations than the Delta coronavirus variant, supporting conclusions reached in South Africa.

Indian markets hit a near four-month low and tumbled as much as 3% on Monday on fears over a surge in Omicron cases across the globe and associated lockdowns.

Global markets, including India, have staged a recovery in the past three sessions with investors buying the dip. Indian stocks, however, are still nearly 8% off from their October peak.

“Omicron was the only fear for markets. Once they know it is not severe, market recovery is likely possible because corporate earnings are going to be very good with crude and commodity prices cooling off. Margin expansion is likely,” said AK Prabhakar, head of research at IDBI Capital.

“This correction was an opportunity to buy. The fears of a third wave of COVID-19 have mellowed down, which is positive for markets.”

The Nifty IT index rose 1%, while the energy index gained 1.3%.

Shares of pharmacy chain operator Medplus Health Services ended 40.85% higher in their Mumbai market debut.

Meanwhile, minutes of India’s December monetary policy committee meeting showed members suggested some key areas of growth warrant continued policy support.