Indian shares bounce back; Nifty sees best day in over 2 years

By Tanvi Mehta

(Reuters) - Indian shares rebounded nearly 2 percent on Friday, as the rupee strengthened due to an overnight fall in crude prices, a day after markets posted the worst start to the October quarter in a decade following the global rout.

The rupee gained sharply to hit a one-week high at 73.62 per dollar versus its previous close of 74.14, while the benchmark 10-year bond yield was down 2 basis points at 7.97 percent.

Oil prices gained slightly on Friday, reversing two days of declines due to sharp falls in equity markets and indications that supply concerns have been overblown. [O/R]

"Markets continue to be hanging around with a downward bias. There are corrections, but not a change in direction... Doesn't look like local factors have an impact now, next week will depend on global action and results," said Jayant Manglik, president-retail distribution at Religare Broking.

The broader Nifty index was up 1.96 percent at 10,435.35 as of 0543 GMT. It rose as much as 2.14 percent, its biggest daily percentage gain since May 25, 2016.

The benchmark BSE Sensex was 1.92 percent higher at 34,654.63, after rising as much as 2.1 percent - the most since March 14, 2017.

Both indices are poised to end the week higher for the first time in six weeks. The sharp global selloff on Thursday made it the worst start to the October quarter for the NSE index since 2008.

IT and pharma companies were the only ones bucking the trend, with only seven of the 50 Nifty companies down.

Tata Consultancy Services Ltd was the top drag on the index, with shares falling nearly 4 percent despite posting a record quarterly profit on Thursday, over margin concerns.

"TCS was a bit of a surprise. People wonder if TCS can repeat this (Q2 results)," Manglik said.

Bank of Baroda rose 4 percent after the Indian government extended the term of the chief executive officer.

Auto stocks also gained, with the Nifty Auto index up 3.2 percent. Shares of Mahindra and Mahindra Ltd and Maruti Suzuki India rose over four percent each.

(Reporting by Tanvi Mehta in Bengaluru; Additional reporting by Gaurav Dogra; Editing by Rashmi Aich)