IT, financial stocks drive Indian shares up as omicron concerns ebb

Indian shares rose for a third straight session on Thursday, led by information technology and financial stocks, as global risk sentiment improved after a study showed hospitalisation risk from omicron was lower compared with the delta coronavirus variant.

The NSE Nifty 50 index rose 0.7% to 17,070 by 0441 GMT and the benchmark S&P BSE Sensex gained 0.75% to 57,326.85.

The risk of hospitalisation for patients with the omicron variant is 40% to 45% lower than for patients with the delta variant, according to research by London's Imperial College published on Wednesday.

"Omicron was the only fear for markets. Once they know it is not severe, market recovery is likely possible because corporate earnings are going to be very good with crude and commodity prices cooling off. Margin expansion is likely," said AK Prabhakar, head of research at IDBI Capital.

"This correction was an opportunity to buy. The fears of a third wave of COVID-19 have mellowed down, which is positive for markets."

Indian markets hit a near four-month low and tumbled as much as 3% on Monday on fears over a surge in omicron cases across the globe and associated lockdowns.

Global markets, including India, have staged a recovery in the past three sessions with investors buying the dip. Indian stocks, however, are still nearly 8% off from their October peak.

The Nifty IT index rose 0.8%, while the finance index was up 0.6%.

Meanwhile, minutes of India's December monetary policy committee meeting showed members suggested that some key areas of growth warrant continued policy support.

Shares of pharmacy chain operator Medplus Health Services listed at a premium of 31% in their Mumbai market debut.