Sensex rose on Wednesday, tracking gains in Asian markets, on hopes that the worst of the coronavirus in China may have passed.
The broader NSE Nifty 50 index rose 0.8% to 12,207.60 by 0932 IST and the benchmark S&P BSE Sensex was up 0.89% at 41,582.60.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.31% as China's senior medical adviser on Tuesday forecast the epidemic would peak this month, bringing cheer to global investors.
In the domestic market, metal stocks and state-owned banks led gains among sectors.
“Markets know that the epidemic risk will subside in a quarter or two,” said Saurabh Jain, assistant vice president at SMC Global Securities, in New Delhi.
“There is also a lot of liquidity in markets.”
The Nifty metals index rose about 1% as global metal prices saw modest gains on subsiding virus worries. The Nifty PSU index, which tracks state-owned banks, gained 0.75%.
Carmaker Tata Motors led gains on the blue-chip index, rising 1.6%, followed by steelmaker Tata Steel, which rose 1.7%.
Indusind Bank was among the top laggards of the day, down 1.6%, after rating agency Moody's changed its outlook to “negative” on the lender.
Meanwhile, investors also awaited key inflation data for the month of January. A Reuters poll from last week showed retail inflation likely rose to a near six-year peak in January as food prices stayed high.
Higher inflation has kept the country's central bank from raising interest rates amid concerns of a lack of sufficient stimulus to drive growth in Asia's third-largest economy.