Indian shares rose for a second consecutive session on Thursday, as state-owned lenders such as State Bank of India led the recovery from recent falls, while hopes of positive quarterly earnings also lifted sentiment.
Indexes had fallen in June, snapping a five-month winning run, largely due to sharp falls in state-run lenders amid worries about provisioning levels at a time when the sector is starting bankruptcy proceedings against 12 of the country's largest loan defaulters.
But sentiment is starting to recover, with a trouble-free roll-out of the goods and services tax (GST) adding to hopes of improving corporate profits and stronger economic growth.
"The overall mood in the market is quite positive and expectations of positive quarterly results are making investors make stock-specific moves," said Deven Choksey, managing director, K.R Choksey Investment Managers.
The broader NSE Nifty was up 0.41 percent at9,677.25 as of 0630 GMT, while the benchmark BSE Sensex was 0.48 percent higher at 31,395.66.
The Nifty PSU bank index surged as much as 2.8 percent, advancing for a second session, with Canara Bank Ltd and Syndicate Bank Ltd up more than 3 percent each.
The sub-index had slumped about 6 percent in June.
Meanwhile, shares of Punjab National Bank jumped as much as 4.4 pct after Nomura upgraded the stock to 'Buy' from 'Neutral' on Wednesday.
ITC Ltd, which was down in the last two sessions, rose as much as 2.3 percent on hopes it would be one of the primary beneficiaries of GST because of the lower tax rates for cigarettes.
(Reporting by Vishal Sridhar in Bengaluru; Editing by Sunil Nair)