BENGALURU, Nov 26 (Reuters) - Indian shares jumped on Thursday in a broad-based rally after a sharp fall in the previous session, as metals and financial stocks rose against the backdrop of an improving economic outlook for the year ahead.

Most sectors settled higher but metals and mining shares rose the most among 13 sectoral indexes, gaining 3.85% to clock their best day in three weeks, in line with a rise in metals prices globally.

The NSE Nifty 50 index ended 1% higher at 12,987.00, rebounding from losses earlier in the session, and a more than 1.5% drop on Wednesday. The S&P BSE Sensex closed 0.98% higher at 44,259.74.

Five financial companies including HDFC Bank and Kotak Mahindra Bank were the top boosts to the Nifty 50, followed by JSW Steel and Tata Steel, which rose 6.1% and 5.0%, respectively.

Sectors, including metals and real estate, have gained sharply this month as investors continue to favour companies seen as likely to benefit from an economic recovery and as foreign money managers pump billions of dollars into Indian equities.

Inflows from foreign institutional investors have reached a record of more than $7 billion this month.

India's economy is expected to recover early next year from recession, but at a modest pace, according to a majority of economists in a Reuters poll.

World markets were trading higher on optimism around vaccines and the incoming Biden administration in the United States. (Reporting by Sachin Ravikumar in Bengaluru; Editing by Shounak Dasgupta)