MUMBAI (Reuters) - Beaten-down shares rose more than 1 percent on Wednesday in a volatile session, led by gains in financial stocks after soft inflation and industrial output data stoked hopes of an interest rate cut.
Gains were also supported by buying related to inclusion of some shares in MSCI India.
The Nifty rose 1.34 percent, while the benchmark Sensex gained 1.39 percent in a session marked by high volatility.
India VIX <.NIFVIX>, a gauge of expected volatility in Indian shares, surprisingly rose alongside shares, to as high as 21.4, its highest since Feb. 25, amid worries on key land, tax reforms and retrospective taxation of foreign investors.
Financial shares led the gains. The Bank Nifty rose 2.66 percent, marking its biggest daily gain since April 28, 2015.
Among those included in MSCI India index, Bharat Forge rose 1.8 percent and Shree Cement ended 8.7 percent higher.
(Reporting by Abhishek Vishnoi; Editing by Anand Basu)
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