Shares rose on Thursday after six consecutive sessions of losses, boosted by gains in beaten down metals and energy companies, with investors eyeing initiatives from central banks to allay fears of a global recession.
The NSE Nifty 50 index rose 0.6% to 16,948.50 as of 0511 GMT, while the S&P BSE Sensex gained 0.5% to 56,864.11.
Global equities staged a partial comeback after Britain's central bank launched an emergency bond buying programme to stabilise the market in an attempt to dampen investors' concerns of a contagion across the financial system. [MKTS/GLOB]
"Thursday's bounce has more to do with UK's measures and positive global cues. Some amount of short squeeze also can happen due to the expiry day," said Anita Gandhi, director at Arihant Capital Markets.
Investors were likely positioning ahead of the Reserve Bank of India's policy decision on Friday, when the central bank is widely expected to raise interest rates, analysts said.
"More than rate hikes, the commentary of the RBI will also be very essential," Gandhi said, adding that sharp correction in the markets has made valuations look "attractive."
Foreign institutional investors (FIIs) sold a net 27.72 billion Indian rupees ($340.5 million) worth of equities on Wednesday, while domestic investors purchased 25.44 billion rupees of shares, as per provisional data available with the National Stock Exchange.
FIIs have sold nearly 106.97 billion rupees worth Indian equities so far into the week until Wednesday, NSE data showed.
The Nifty metals index rose 2.5% after losing nearly 7% this week as of Wednesday, while the energy index <.NIFTYENR> gained 1% after falling nearly 5%.
Hindalco Industries was the top Nifty 50 gainer, rising 3.5%, while Asian Paints the top loser, falling 2.5%.
Indian cosmetics-to-fashion retailer Nykaa's parent FSN E-Commerce Ventures rose as much as 5.6% after the company said it will consider an issue of bonus shares.
