A general view of the Bombay Stock Exchange (BSE), after Sensex first surpassed the 50,000 level, in Mumbai, India on January 21, 2021. REUTERS / Francis Mascarenhas

BENGALURU, Jan.5 (Reuters) – Indian stocks rose for a fourth straight session on Wednesday, buoyed by a rally in banking and financials, recovering from a drop earlier in the day amid concerns over a spike in coronavirus cases in the country.

The benchmarks were volatile until midday, as investors analyzed headlines on new pandemic-related restrictions across the country.

The NSE Nifty 50 Index (.NSEI) was up 0.67% to 17,925.25 and the benchmark S&P BSE Sensex (.BSESN) closed up 0.61% to 60 223.15. Both indices have gained more than 3% so far this week.

Bank stocks extended their rally to a fifth session, pushing benchmarks higher.

Nifty’s banking index (.NSEBANK), which only gained 13.5% in 2021, has had a good start to the year, rising more than 6% so far.

Financial stocks Bajaj Finance (BJFN.NS) and Bajaj Finserv (BJFS.NS) were the main winners for Nifty, rising around 5% each.

“The markets have performed very well in recent days and already appear to have predicted a potentially milder impact from a third wave of coronavirus infections,” said Narendra Solanki, head of equity research at Anand Rathi Investment Services .

However, analysts have warned that if hospitalizations due to the Omicron variant increase, it could negatively impact markets.

India recorded 58,097 new cases of the coronavirus on Wednesday, and authorities imposed additional restrictions to curb the spread of infections. Read more

The S&P BSE telecommunications index (.SPBSTLIP) closed up 1%, driven by an 8% gain by telecommunications equipment maker HFCL Ltd (HFCL.NS).

Reversing the trend, Information Technology (IT) stocks posted large losses and the Nifty IT Index (.NIFTYIT) fell nearly 2% with all of its constituents closing in the red.

Analysts said the drop in IT stocks can be attributed to profit accounting, as the sub-index rose nearly 60% in 2021 and stock prices have been at high levels.

Report by Shivani Singh in Bangalore; edited by Uttaresh.V and Vinay Dwivedi

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