Indian shares rise for a third day as Omicron fears recede

Shares rose for a third straight session on Thursday, led by gains in information technology and energy stocks on improved investor sentiment after a study showed Omicron’s risk was lower compared with the Delta coronavirus variant.

The NSE Nifty 50 index edged up 0.69% to 17,072.60 and the benchmark S&P BSE Sensex gained 0.68% to close at 57,315.28.

Protection, U.K. data

Two vaccine manufacturers said their shots offered protection against Omicron, as U.K. data suggested it may cause proportionally fewer hospitalisations than the Delta variant, supporting conclusions reached in South Africa.

Indian markets hit a near four-month low and tumbled as much as 3% on Monday on fears over a surge in Omicron cases across the globe and associated lockdowns.

Global markets, including India, have staged a recovery in the past three sessions with investors buying the dip. Indian stocks, however, are still almost 8% off from their October peak.

“Omicron was the only fear for markets,” said A.K. Prabhakar, head of research at IDBI Capital. “Once they know it is not severe, market recovery is likely possible because corporate earnings are going to be very good with crude and commodity prices cooling off. Margin expansion is likely,” he added.

‘Opportunity to buy’

“This correction was an opportunity to buy. The fears of a third wave of COVID-19 have mellowed down, which is positive for markets,” Mr. Prabhakar said.

The Nifty IT index rose 1%, while the energy index gained 1.3%.

Shares of pharmacy chain operator Medplus Health Services ended over 40% higher in their market debut.