Shares of state-controlled banks rise as bonds gain ahead of CPI data.
CPI data due at 1200 GMT is expected to show a rise in December inflation to 5.4 per cent, but within RBI’s target of 6 per cent by January 2016
According to traders, declining bond yields may lead to Treasury gains on bond portfolios.
State-run banks are the biggest buyers of government debt in markets.
State Bank of India rose 0.6 per cent, Punjab National Bank was up 1.7 per cent, and Allahabad Bank gained 2.3 per cent.
The benchmark 10-year bond yield fell 3 bps to 7.81 per cent.