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Indian shares extended gains for the second straight session on Tuesday, aided by a jump in metal stocks, as risk appetite got a boost from China's plans to loosen COVID-19 restrictions further.

The Nifty 50 index closed 0.65% higher at 18,132.30, and the S&P BSE Sensex rose 0.60% to 60,927.43.

Metals led the sectoral gains, jumping over 4.2%, its biggest daily gains in over seven months.

China's plans to ease COVID-19 curbs has "eased the nerves in the market a bit," Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

GRAPHIC : Nifty metal rises most in over seven months - 

Top metals' consumer China announced on Monday it will stop requiring inbound travellers to go into quarantine starting from Jan. 8, moving further away from a strict "zero-COVID" policy that had disrupted its economic activity.

The country's COVID-19 management will also be downgraded to the less strict Category B from the stringent Category A, the National Health Commission said, bolstering hopes of a recovery in the world's second-largest economy.

Domestic infrastructure spending, improved balance sheets of metal companies and hopes of demand revival in China have powered Indian metal stocks, said Anita Gandhi, director at Arihant Capital Markets.

China's announcement also boosted stock markets elsewhere in Asia and Europe. The MSCI Asia ex-Japan index gained 0.59% and pan-European STOXX 600 index was up 0.47%. [MKTS/GLOB]

Analysts said high intermittent volatility will likely be a feature of the Indian market ahead of the December-quarter earnings season and union budget, while also providing "buy-on-decline" opportunities.

Forty of the Nifty 50 constituents logged gains, with Hindalco Industries, Tata Steel, JSW Steel, rising over 4%.

Among individual stocks, Oil and Natural Gas Corp Ltd rose 2.23%, and was among the top Nifty 50 gainers, on upbeat earnings forecast from ICICI Securities.