Indian shares rose on Tuesday after tumbling as much as 3% in the previous session as information technology and metal stocks gained, though the impact of surging Omicron COVID-19 cases on global economic recovery kept investors worried.
The NSE Nifty 50 index was up 1.5% at 16,860.25 by 0504 GMT and the benchmark S&P BSE Sensex rose 1.3% to 56,539.75. The indexes are still more than 10% away from their peak in October.
"There are concerns regarding higher valuations. Steep corrections make valuations comfortable and we will see these kind of pull backs more often," said Siddharth Khemka, head of retail research at Motilal Oswal Securities.
"Foreign institutional investors' portfolio allocations have seen sharp outperformance. They will have to realign their portfolios and that's what we are seeing right now," Khemka said.
Investors have also been keeping a tab on the spread of the Omicron variant and associated restrictions, with New Zealand delaying the planned reopening of its international border and several other countries reimposing social-distancing measures.
"Market will remain sideways and the selling pressure will exist until there is some global clarity on the new variant and interest rate policies of central banks," Khemka added.
The Nifty IT index rose 1.2%, while the metals index gained 1.7%, after falling 2% and 4%, respectively in the previous session.
Wipro Ltd rose 3.1% after it bought cybersecurity consulting firm Edgile for $230 million.
Shares of MapmyIndia, which powers Apple Inc's maps in the country, surged 54% in their Mumbai market debut.
SoftBank-backed Indian e-commerce platform Snapdeal filed for an initial public offering on Tuesday, joining dozens of firms in the country that have tapped the capital markets this year.