A bird flies past the Bombay Stock Exchange building in Mumbai

BENGALURU (Reuters) – Indian shares rose on Wednesday on the back of a resurgence in banking stocks as markets awaited government stimulus measures to support the coronavirus-hit economy, but losses in oil refiners’ stocks curbed gains.

Battered financial stocks provided the biggest boost to the NSE Nifty 50 index, which settled 0.71% higher at 9,270.90 after a 6.6% slide over the last two sessions. The S&P BSE Sensex climbed 0.74% higher to close at 31,685.75.

The Nifty bank index, which had fallen 10% over the last two sessions, ended 2.2% higher, as India’s top private-sector lender HDFC Bank Ltd gained 3.8%.

However, stocks of oil refining companies were hit by the government’s decision to increase taxes and duties on petrol and diesel late Tuesday, a move that is expected to raise costs for these companies. Bharat Petroleum Corp Ltd fell 1%, while Indian Oil Corp shed 2.7%.

Meanwhile, India’s services activity suffered a shock collapse last month as the coronavirus lockdown crippled global demand. The Nikkei/IHS Markit Services Purchasing Managers’ Index plunged to an eye-popping 5.4 in April from March’s 49.3, an unprecedented contraction since the survey first began over 14 years ago.

India has been in a nationwide lockdown since late March, although some restrictions have since been gradually eased. The number of coronavirus cases in the country reached nearly 50,000 as of Wednesday and deaths neared 1,700.

Economists have predicted that India will need further fiscal stimulus to support the economy, especially as many Indians find themselves without an income, but the nature or timing of any fiscal measures remain uncertain.

India’s chief economic adviser K.V. Subramanian told the Economic Times newspaper in an interview published on Wednesday that a stimulus was expected “soon”, but cautioned against demands for government support similar to that provided by other nations, as the cost would be too high.

Global shares, meanwhile, struggled as mixed earnings, doubts about the easing of coronavirus lockdowns and simmering U.S.-China tensions cast a pall over markets.

(Reporting by Sachin Ravikumar; Editing by Rashmi Aich)