The recent advance in Indian equities came to a halt on Tuesday, as gains in energy sectors were countered by losses in commodities and financials, amid optimism over reducing daily instances of COVID-19.

The blue-chip NSE Nifty 50 index fell 0.05 % to 15,574.85, while the benchmark S&P BSE Sensex remained constant. Both indices finished 1% higher on Monday, adding to gains from the previous week.

“We believe the market has a one-way drive up, and we're seeing a slight correction here as the market is already moving up constantly for the previous seven to eight trading sessions,” said Samrat Dasgupta, CEO of Esquire Capital Investment Advisors.

The market is also anticipating an upbeat situation as the economy recovers, with everything expected to be back to normal in the next three to four months, he added.

Energy stocks rose as Brent oil prices surpassed $70 and reached their highest level since March, as confidence about the fuel demand forecast strengthened.

The Nifty 50 was boosted by Reliance Industries Ltd and exploration Oil and Natural Gas Corporation Ltd, which rose 0.40% and 3.5% respectively.

Because of a continuous drop in daily COVID-19 instances, investor sentiment has improved in recent days. The country saw its lowest daily rise in new infections since April 8 at 127,510, remaining below 200,000 for the fifth day in a row.

The Indian economy dropped by 7.3% in 2020-21, as per government figures released on Monday, the country's terrible recession since independence, as coronavirus lockdowns forced millions out of work.

Asia's third-largest economy increased by 1.6% between January and March, the fourth fiscal quarter, after emerging from its first "technical recession" since 1947 after two consecutive quarters of decline.

As per a survey conducted by Bangalore's Azim Premji University, around 230 million Indians slipped into poverty because of the pandemic last year, with the poor classified including those living on less than 375 rupees ($5) a day.

A loosening of limitations near the end of 2020 aided a promising recovery during activity, although it may be short-lived due to an increase in Covid-19 cases in April and May.

As per the Centre for Monitoring the Indian Economy, India's deadly second wave, which has killed 160,000 people within eight weeks, has caused additional lockdowns and led to 7.3 million job losses in April alone.

That implies additional suffering in a country where 90% of the workforce is in the informal sector, where there is no social safety system, and where millions are unqualified for emergency government rations.

In response, Prime Minister Narendra Modi's administration has thus far refrained from introducing any new substantial stimulus measures.

The administration has come under increasing fire, particularly from Nobel laureates Esther Duflo and Abhijit Banerjee, for concentrating on loans to hard-hit enterprises instead of direct cash transfers to disadvantaged households.

As shown in a recent assessment by the British financial services giant Barclays, the economic cost of India's second wave is $74 billion, or 2.4% of GDP.

Because output fell so dramatically last year, the headline statistics for the current fiscal year will seem robust.

The Indian central bank forecasts annual growth of 10.5%, while the International Monetary Fund forecasts 12.5% the quickest among major countries.

“We forecast 10% GDP growth in FY22, with a small downward bias,” Kotak Mahindra Bank Senior Economist Upasna Bhardwaj told AFP.

Nevertheless, she cautioned that experts would "have to reassess this assumption much more frequently, considering that all depends on the rate of vaccines and the speed of limitations."

“While this year's circumstances weren’t as terrible as last year's nationwide lockdown, the economy has been under a stressful situation owing to localized restrictions, something we expect to persist for the rest of the year.”

Even before Covid-19 hit, India's economy had been experiencing a lengthy slump, but the epidemic erased years of progress. Last year, an estimated 50 million Indians were anticipated to rise out of poverty.

Instead, the poorest 20% of households lost their complete income in April and May when the business ceased.

According to an Azim Premji University analysis, the months-long statewide lockdown placed about 100 million people out of jobs, with over 15% still unable to find employment towards the end of the year.

Namdev Sakpal, 43, was laid off by travel operator Thomas Cook last year and has been searching for employment for months.

“I can't even seek employment since the local trains aren't running. “Everything is shut,” the father of three told AFP.