Indian shares ended higher on Tuesday after three days of losses, spurred by a surge in Bharti Airtel and optimism around a potential coronavirus vaccine, but a late slide in banking stocks and Reliance Industries capped gains.
The NSE Nifty 50 index had risen over 2% on Tuesday, but ended just 0.63% higher at 8,879.10, while the S&P BSE Sensex closed up 0.56% at 30,196.17.
The indexes, down about 27% this year, have seen sharp falls in the last three sessions as India's economic relief measures disappointed markets.
Globally, other Asian markets had risen after news that early-stage tests on a possible COVID-19 vaccine showed promise.
Shares in Bharti Airtel Ltd jumped 11.3% and hit a record high as the telecoms firm reported a 15% rise in quarterly revenue. The stock recorded its best day since 2009, and led the gains on the Nifty 50.
The Nifty banking index closed 0.5% lower, while the Nifty PSU banks index that tracks state-run lenders fell 2.6%.
Banking stocks have been among the worst performers in 2020, with the industry staring at more defaults by businesses hit by the COVID-19 pandemic.
The number of cases in India surged past 100,000 on Tuesday, and the death toll stood at 3,163.
India is currently under a two-month lockdown that has hit the incomes of millions of workers and left businesses without revenues. Although some lockdown curbs have been eased, air travel and most public gatherings remain restricted.
Ratings agency Moody's warned the health crisis could worsen asset quality at non-bank financial institutions (NBFIs), or shadow banks, which are a crucial source of credit for many in India.
"Weakening solvency of NBFIs in turn will pose a risk to the stability of the broad financial system because banks have large direct exposures to them," Moody's said.
Shares in oil-to-telecoms conglomerate Reliance Industries Ltd fell 2.2% and was the biggest drag on the Nifty 50.
Stocks in Adani Group companies saw a late surge. Adani Ports jumped 8.8% and was the second biggest gainer on the Nifty 50. Adani Power gained 14% and Adani Gas 4.7%.