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COVID-19 surge caps gains in Indian shares
Photo Credit: Reuters

Indian shares rebounded on Tuesday to close higher, helped by pharma and metal stocks, while a second surge in domestic coronavirus cases and fears over its impact on the economy capped gains.

The NSE Nifty 50 index rose 0.3% to 14,683.50 and the S&P BSE Sensex gained 0.1% to 49,201.39. The indexes rose as much as nearly 1% earlier in the day, after falling about 1.5% on Monday.

India breached the grim milestone of 100,000 daily infections for the first time on Monday, and cases jumped by 96,982 on Tuesday, data from the health ministry showed.

"Sentiments are really weak due to rise in coronavirus cases and state governments are starting to put restrictions," said Rahul Sharma, market strategist and head of research at Equity99 markets.

Many Indian state leaders have asked Prime Minister Narendra Modi to open up vaccinations to most of the country's hundreds of millions of adults, following a second surge in infections that has eclipsed the first wave.

"Defensive sectors like fast-moving consumer goods (FMCG), pharma, information technology are mostly preferred by the markets," said Sharma.

Pharmaceutical stocks rose 1.8% and FMCG stocks gained 0.9%.

Firmer commodity prices globally pushed metals index up 1.4%. JSW Steel climbed 3.9% and was among the top gainers on the Nifty 50.

Shares of Adani Ports and Special Economic Zone rose 12.6% to hit a record high after reporting a jump in cargo volumes.

Separately, investors await the outcome of the central bank's monetary policy committee meeting on Wednesday.

In other domestic news, the southern states of Tamil Nadu and Kerala and the territory of Puducherry began voting on Tuesday to elect local governments. Elections in the eastern states of Assam and West Bengal are ongoing.

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