(Bloomberg) -- Indian stocks advanced in a volatile session after the nation's benchmark capped its steepest two-day slide in more than 11 years.
Investors weighing an oil slump against economic risks fueled by the coronavirus outbreak sent the S&P BSE Sensex Index up 0.2% to 35,697.4 at the close in Mumbai, reversing an earlier loss of as much as 1.1%. The NSE Nifty 50 Index added 0.1%. Markets were shut Tuesday for a local holiday.
A measure of volatility expectations spiked for a third day after ending at its highest level since May 2014 on Monday, when the Sensex capped its worst two-day drop since January 2009 and trading volume soared. The Nifty has sunk 14% from a record high in January.
Stocks benefiting from cheap oil dominated Wednesday's gains after prices plunged Monday following the breakdown of the OPEC+ group. About 60% of India's crude imports were sourced from the Middle East last year.
Also read: India Poised to Gain on OPEC+ Pain After Oil Windfall on Virus
Strategist View
“The lower the oil price, the better it is for India,” said Umesh Mehta, head of research at Samco Securities Ltd. in Mumbai. “There's a loss of confidence because of lower share prices that will play out on immediate sentiment, but the panic bottom may be behind us.”
The Numbers
- Six of the 19 sector indexes compiled by BSE Ltd. advanced, led by a gauge of energy companies
- Reliance Industries Ltd. gained 3.6%, and contributed the most to the Sensex's advance. Infosys Ltd. was the biggest drag, dropping 2.7%
Market-related stories
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- Market Drop Adds to Pressure on Indian Tycoons to Sell Stakes
- Top India Hedge Fund Hoards Cash as Market Sell-off Rumbles On
- Asia's Emergency Rate-Cut Candidates If Virus Threat Persists
--With assistance from Min Jeong Lee and Nupur Acharya.
To contact the reporter on this story: Ishika Mookerjee in Singapore at imookerjee@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie, Cecile Vannucci
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