BENGALURU: Indian shares rose on Tuesday, led by gains in banking and auto stocks, as a lesser-than-expected rise in June retail inflation is expected to make the central bank keep policy rates at current levels to support the COVID-19 ravaged economy.

As of 0357 GMT, the blue-chip NSE Nifty 50 index and the benchmark S&P BSE Sensex were up 0.43% and 0.42% at 15,760.35 and 52,591.06 points, respectively.

ICICI Bank's shares rose 1.8% and HDFC Ltd gained 1.5%. The lenders were among the top boosts to the Nifty Bank index that added 0.8%.

The Nifty Auto index was up 0.65%, helped by gains in Jaguar Land Rover parent Tata Motors, which was up 0.8%.

Asian markets extend rally as earnings season looms

Global markets helped uplift sentiment as world stocks hit record levels on Monday while investors gauged the implications of the Delta variant of the COVID-19 coronavirus on economic growth.

In Mumbai trading, shares of drugmaker F D C Ltd were up 3.3% after it launched an oral suspension formulation of COVID-19 treatment favipiravir, while Sunteck Realty's shares jumped 6.4% after the firm reported a rise in first-quarter pre-sales bookings.

India's retail inflation rose less than expected in June, strengthening the view that the central bank could keep policy rates at current levels to support an economy hit hard by COVID-19.

Economists said the June inflation print was above the upper range of the central bank's 2%-6% target, but price pressures appeared to be easing.