Sharp gains in metal and technology stocks set India's blue chip indices on course for their best session in over three weeks on Tuesday, even as investors grappled with worries over a possible hit to growth from aggressive central bank rate hikes.
The Nifty rose 1.25% to around 15,540 in early trade while Sensex climbed 1.19% to around 52,214.
The blue chip indices are set for a second straight session of gains after suffering heavy losses last week on fears that aggressive rate hikes around the globe to curb inflation could lead to a recession.
"A rebound was expected after the heavy beating the market took last week, but market sentiment is still pessimistic on rate hike worries; people are still struggling," said Saurabh Jain, assistant vice president research at SMC Global Securities.
While the Nifty and Sensex made a modest recovery on Monday, the Nifty Small Cap 100 and the Nifty Midcap 100 suffered hefty losses. On Tuesday, the Nifty Small Cap climbed 2% and the Nifty Midcap rose 1.8%.
"It is difficult to predict whether we have reached the bottom. However, if crude corrects more, there is hope that central bank hawkishness may recede," Jain added.
The Nifty IT index, which has plummeted over 30% this year, rose as much as 2.4%.
The Nifty Metal index climbed 2.3% after plumbing 14-month lows in the previous session. The Nifty Auto index advanced 1.5%.
KEC International climbed 5.9% after the construction company said it bagged orders worth 10.92 billion rupees ($139.97 million).
Suven Life Sciences surged 16.3% after the pharmaceutical company said it would consider a rights issue of shares.
Watch and jewellery maker Titan Company was the biggest percentage gainer on the Nifty, rising as much as 5.6% in its biggest intraday gain since mid-October, 2021.