Reuters Market Eye - Shares in state-owned banks rally tracking gains in benchmark bonds after Reserve Bank of India governor Raghuram Rajan said it will buy bonds worth 80 billion rupees via open market operations (OMO) on Monday.
The benchmark 10-year bond yield has fallen 16 bps in the last two days raising hopes that banks would be able to make gains on their bond portfolios.
State Bank of India gains 1.6 percent, Canara Bank Ltd
Traders say next on watch is WPI inflation, due later in the day.
Indian inflation is forecast to have risen to uncomfortable levels for policymakers in October due to stubbornly high food prices, adding to the pressure for further interest rate rises despite slowing economic growth.
(Reporting by Abhishek Vishnoi)
