Markets rose on Tuesday, lifted by energy companies and beaten-down metal stocks, as softening commodity prices eased worries around red-hot inflation.
Nifty Metal added 1.8% after falling as much as nearly 2.5% in the previous session, while the energy index was up 1.3%.
"Commodity prices have eased from the top. That has reduced inflationary fears. While rate-hike and recession concerns have not completely evaporated, the doomsday scenario has come down a lot," said Anand James, chief market strategist at Geojit Financial Services.
Prices of several commodities, including steel, iron, wheat, palm oil, and crude, have fallen from their multi-month highs over the past two weeks.
India Volatility Index (India VIX), which indicates traders' expectations about market instability over the next 30 days, was down 2% at 20.535.
The volatility index has been supportive and as we enter the earnings season, it gives some sort positivity to the markets to look beyond rate hikes and recession worries, James said.
Among individual gainers, PTC India Financial Services jumped nearly 20% after the non-banking financial company said an independent audit issued "satisfactory report" after deeming that company maintained sufficient transparency.
PTC India Financial has been under the Indian market regulator's radar for its corporate governance issues.
Marksans Pharma soared 17.8% after a proposal for a share buyback.
Meanwhile, Asian shares inched up as positive economic data and hints of easing Sino-U.S. tensions offered some respite to the recent sell-offs, though persistent fears about a recession and sky-high inflation kept most buyers at bay.