Indian shares recovered from early losses to end higher on Friday in a volatile session, as a pullback in U.S. Treasury yields from 14-month highs brought back some risk appetite into the market, which has fallen nearly 2% this week.
The blue-chip NSE Nifty 50 index ended up 1.28% at 14,744 and the benchmark S&P BSE Sensex rose 1.3% to 49,858.24. Earlier in the session, the Sensex and Nifty shed up to 1.43% and 1.28%, respectively.
"There is some minor correction in (U.S.) bond yields and the market is appreciating that. The Nifty was in a oversold zone and there is some recovery there as well as some short covering," said Rahul Sharma, head of research, Equity99 Advisors in Mumbai.
U.S. bond yields on Friday edged off the 14-month highs reached the day before. India's two main stock exchanges posted their first weekly decline in three on a fresh surge in domestic COVID-19 cases and rising U.S. bond yields.
Sentiments in the short-term, however, are weak due to a rise in COVID-19 cases and volatility in bond yields, Sharma said.
India's coronavirus infections surged to a more than a three-month high on Friday, led by record daily increase in the western state of Maharashtra, where authorities have adopted fresh curbs to restrain the spread of the disease.
Shares of multiplex operators PVR Ltd and smaller rival Inox Leisure Ltd fell as much as 6.7% and 5.4%, respectively, after Maharashtra made RT-PCR COVID-19 test report mandatory for people entering shopping malls.
Future Group companies, including Future Retail and Future Consumer, dropped nearly 10% each.
An Indian court on Thursday restrained Future Group chief Kishore Biyani from selling his personal assets following Amazon.com Inc's challenge against the Indian group's $3.4 billion sale of its retail business to Reliance Industries.