Indian shares rose 1 per cent on Tuesday, driven by gains in metals and auto companies, as investors used recent dips to enter the market, helping it to recover from three-week lows hit in the previous session.

The NSE Nifty 50 index was up 1.2 per cent at 17,525, while the S&P BSE Sensex gained 1.2 per cent at 58,661.7.

“The sharp pullback we have seen from 18,000 levels has encouraged people to be more risk-on,” said Anand James, chief market strategist at Geojit Financial.

“Some factors, like the quantum of the U.S. Federal Reserve rate hike going forward, is still on evolving stage,” James said.

The Nifty 50 index had lost more than 800 points after hitting a multi-month peak of 17,966.55 on August 19 in a span of six sessions.

Read also: Nifty may open in green on global cues

“From here on, we will continue to see these kind of blows between the bulls and the bears, as we assess the Fed trajectory,” he said, adding that volatility had declined heavily.

The Nifty metals index rose 1.9 per cent, while the auto index gained 2.2 per cent.

“Globally, all countries are facing the churn and India seems to be the best placed jurisdiction in terms of growth and inflation outlook in FY23,” Soumya Kanti Ghosh, group chief economic adviser, State Bank of India said in a report.

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“We believe the China story may now be facing clear headwinds and India is likely to benefit from such stark realities over the longer term.”

In the benchmark Nifty 50 index, all 50 stocks traded in the positive territory.

Among individual shares, Shipping Corp of India rose 5 per cent after a report said the Central government is likely fast-track disinvestment.

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