By Bharath Rajeswaran
(Reuters) -Indian shares rose on Tuesday, led by a rally in energy stocks after a brokerage upgraded ONGC and as Reliance recovered some of its losses from the previous session.
The Nifty 50 gained 0.39% to 23,707.9 points, while the BSE Sensex added 0.3% to 78,199.11.
On Monday, both benchmarks lost about 1.6%, their worst single-day performance in three months, on earnings worries after lacklustre updates from some companies, concerns over the spread of human metapneumovirus (HMPV) and sustained foreign outflows.
The government’s clarification that there is no need for undue concern regarding the virus facilitated a recovery in the markets and dip-buying, analysts said.
“While markets have logged gains on Tuesday, any durable market recovery hinges on positive quarterly results, starting on Thursday, and growth-supportive measures from the union budget next month,” said Satish Chandra Aluri, analyst at Lemonn Markets Desk.
The broader smallcaps and midcaps rose 1.4% and 0.9%, respectively.
The oil and gas index advanced 1.6%. Index heavyweight Oil and Natural Gas Corp jumped 3.6% and was the top gainer on the Nifty 50.
CLSA upgraded the upstream oil company’s stock to “high conviction outperform” from “outperform” and raised, citing a potential uptick in earnings and attractive valuations.
Reliance Industries, the second-heaviest stock on the benchmarks, gained 1.9%. It lost 2.7% on Monday.
Drugmaker Biocon surged 6.8% after its unit received approval from Japan’s health authority for a biosimilar drug.
Separately, Jefferies upgraded the stock to “hold” from “outperform” and hiked its target price, attributing potential improvement in growth visibility for its biologics business after the recent clearance of its Bengaluru plant by the U.S. drug regulator.
Life insurers SBI Life and HDFC Life rose 3% and 2.3%, after Centrum initiated coverage on the stocks with “buy” ratings.
Food delivery platform Zomato lost 4.7% after Jefferies downgraded the stock to “hold” from “buy” on worries over profitability due to competition heating up in the quick commerce sector.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema, Mrigank Dhaniwala and Sumana Nandy)
