REUTERS - Indian shares rose over 1 percent on Friday, heading for their third straight session of gains, in line with Asian markets as lacklustre U.S. retail sales data reduced already low chances of an interest rate hike by the Federal Reserve next week.
Sentiment also got a boost from data showing India's trade deficit narrowed slightly in August, a move that will strengthen the government's case for rejecting exporters' calls for a competitive boost through a rupee devaluation.
"Markets are recovering from losses earlier in the week... with heavy investments made in large caps in recent times as far as allocation of new funds are concerned," said Deven Choksey, managing director at KR Choksey Securities.
Investors now await the policy meetings of the U.S. Fed and the Bank of Japan next week for cues on monetary policies.
The broader NSE NIfty was up 1.14 percent at 8,842.25 as of 11.19 a.m. after rising as much as 1.20 percent earlier in the session, while the benchmark BSE Sensex was 1.2 percent higher at 28,749.14.
Both indexes looked set to post their first weekly loss in three.
Among the gainers, bank stocks recovered from the previous session's losses, with the Nifty Bank Index climbing nearly 2 percent.
State Bank of India rose 2.1 percent, ICICI Bank gained 1.4 percent, while Axis Bank climbed 3.6 percent.
Shares of state-run oil refiners also rose on hike in petrol prices. Bharat Petroleum Corp Ltd rose 1.5 percent, while Hindustan Petroleum Corp Ltd gained 1.8 percent.
(Reporting by Samantha Kareen Nair in Bengaluru; Editing by Subhranshu Sahu)
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