By Arnab Paul
(Reuters) - Indian shares rose for a second straight session on Monday, tracking Asian peers, after the U.S. Federal Reserve forecast steady growth and a potential pause in rate hikes, while sentiment was positive ahead of economic data this week.
India is due to post gross domestic product data for the October-December quarter on Wednesday, with a Reuters poll forecasting an expansion of 6.9 percent, the fastest pace in a year.
Fiscal deficit and manufacturing data are also expected in the truncated trading week.
The gains come after stock markets fell on worries over the fallout from a $1.77 billion fraud that hit Punjab National Bank.
"The market has bottomed out for the time being and will discount in general the NPAs (non-performing assets) of state-run banks," said R.K. Gupta, managing director of Taurus Asset Management.
"Corrections could happen, like with the Punjab National Bank saga, but overall the sentiment is positive. Investors will look to the RBI policy meet in April and the March-quarter corporate results."
The broader NSE Nifty was up 0.66 percent at 10,560.45 as of 0625 GMT, while the benchmark BSE Sensex was 0.70 percent higher at 34,380.62.
Shares were trading above the 50-day exponential moving average for the first time in six sessions.
Bank and auto stocks were the leading gainers, with HDFC Bank rising as much as 1.62 percent and Maruti Suzuki India Ltd up 2.42 percent.
Shares of Sterlite Technologies Ltd jumped as much as 10.36 percent after the company procured a 35 billion-rupee order from the Indian Navy.
IT stocks, however, were down, with the IT index falling 0.67 percent amid selling after stocks such as Tata Consultancy Services Ltd rose for four sessions.
Shares of Oriental Bank of Commerce Ltd fell as much as 12.7 percent after India's federal police said on Sunday it had filed a fraud case against executives of Simbhaoli Sugar for causing alleged losses of 1.09 billion rupees ($16.85 million) to the state-run lender.
Asian shares were up, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.73 percent higher.
($1 = 64.6750 Indian rupees)
(Reporting by Arnab Paul in Bengaluru; Editing by Biju Dwarakanath)
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