Indian shares crept higher on Wednesday, with pharmaceutical stocks leading the rise after the country approved a COVID-19 pill, although year-end portfolio adjustments limited the gains.
The NSE Nifty 50 index was up 0.1% at 17,246 by 0515 GMT and the benchmark S&P BSE Sensex rose 0.13% to 57,974.79.
"We are nearing expiry (of derivatives) and it's December-end... There is volatility and we are also coming close to some amount of stability in the markets," said Anita Gandhi, a whole-time director at Arihant Capital Markets.
Indian markets have fallen more than 7% since hitting a peak in October, driven by worries over higher valuations and as the Omicron variant of COVID-19 rapidly spreads across the globe.
"Overall volumes have fallen and markets are consolidating in thin volumes. A mild rally over the year-end also cannot be ruled out because of net asset value-based buying," Gandhi said.
The Nifty pharma index was the top gainer, rising 0.9% a day after India approved Merck's COVID-19 pill and two more vaccines for emergency use.
Early this year, several drugmakers including Dr Reddy's Labs, Aurobindo Pharma, Cipla and Sun Pharmaceuticals signed non-exclusive voluntary licensing agreements with Merck to manufacture and supply molnupiravir in India.
Dr Reddy's and Sun Pharma were the top gainers in the Nifty 50 index, rising 1.5% each.
Metals were the top drags, with the nifty metals index falling 1.2%.
India's market regulator on Tuesday strengthened rules for companies going public, potentially slowing some planned new issues, as it seeks to protect retail investors after a record year of initial public offerings (IPOs).
Asian stocks slipped, following a mixed Wall Street session as the region's investors positioned their portfolios for the new year.