Information technology and energy firms drove shares higher on Tuesday, tracking upbeat global risk sentiment in the absence of major domestic triggers as investors shrugged off worries over the Omicron COVID-19 variant.
By 1:24 pm, the NSE Nifty 50 index was up by 128 points or 0.75 per cent at 17,214.85 and the benchmark S&P BSE Sensex rose by 413.24 points to 57,833.48
"Markets have been trying to consolidate after being extremely volatile over the past two weeks. We are trying to find a floor for the market around the 15,900-16,350 range. Even though equity markets have corrected, the valuation is still on the higher side," said Vinod Nair, head of research at Geojit Financial Services.
The Nifty energy index rose 0.7 per cent, while IT stocks added 0.9 per cent, set for a fifth straight month of gains after advancing 1.5 per cent so far in December.
"IT will continue to be at premium valuation. It is the most stable segment and the story they have about digitalisation is going to improve over the coming years. They are defensive in nature and a very safe sector in terms of volatility," Nair said.
The benchmark indexes are still off by more than seven per cent from a peak touched in October, pressured by a combination of factors including fears over heated valuation and a surge in Omicron cases globally.
Authorities in Britain and France, however, have held off from imposing tough restrictions on movement, betting that high vaccination rates will stop hospitals from being overwhelmed even as cases surge.
Asian shares gained on Tuesday, cruising in the slipstream of another record-setting day on Wall Street amid strong retail sales figures.
Active pharma ingredient maker Supriya Lifescience was listed at a 53.7 per cent premium in its Mumbai market debut, compared with an initial public offering price of Rs 274.