(Bloomberg) -- India’s benchmark stock index rebounded after two days of declines as earnings optimism outweighed concerns the economy may be damped by higher crude oil prices.

The S&P BSE Sensex advanced 0.2 percent to 38,738.67 as of 9:57 a.m. in Mumbai, while the NSE Nifty 50 Index gained 0.2 percent. Five of 49 Nifty companies have reported earnings so far and have beaten or matched estimates, according to data compiled by Bloomberg.

The India NSE Volatility Index, or India VIX, surged to its highest level since February 2016 on Monday as the price of Brent crude oil climbed to a six-month high, adding to anxiety over the outcome of ongoing general elections.

Strategist View

  • "The two-day drop has been overdone and bulls are expected to defend the crucial support of the recent minor low of 11,550," Abhinav Gupta, president of capital markets at Share India Securities Ltd. wrote in a note on Monday.
  • The India VIX rising to three-year high amid rising crude-oil prices and general elections "could lead to some roller coaster rides in the short term," Ruchit Jain, a technical analyst at Angel Broking Ltd., wrote in a note on Monday.

The Numbers

  • Fourteen of the the 19 sector indexes compiled by BSE Ltd. gained, led by a gauge of real estate stocks.
  • Yes Bank Ltd. rose most on the benchmark gauge, rebounding from Monday’s 6.6 percent drop. Larsen & Toubro Ltd. was among the top losers.
  • Twenty three of the 31 Sensex members and 34 of the 50 Nifty companies gained.
  • Essel Propack Ltd. rose as much as 2.5 percent after saying Blackstone is planning to buy a majority stake for $462 million.

Analyst Notes/Market-Related Stories

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  • Rising Crude Oil Prices Are Bad News for Indian Rupee: Economics
  • Traders Await RBI’s $5b Currency Swap Auction: Inside India

To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Kurt Schussler

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