Nifty rallies, recent falls seen overdone

MUMBAI (Reuters) - The Nifty rose as much as 1.2 percent on Friday as investors saw a four-session losing streak as overdone, while gains in regional markets and expectation of a rate cut by the central bank next week also helped sentiment.

Traders said markets have broadly priced in a 25 basis point cut by the Reserve Bank of India at its policy review on Tuesday on the back of easing inflation and middling economic growth.

India is due to release January-March economic growth data later in the day. Although growth is expected to be faster than China, there are nagging doubts over the government's new method of calculating gross domestic product.

"A rate cut of 25 bps is more or less priced in. Fundamentals warrant a rate cut," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

The Nifty was up 0.7 percent at 1:30 p.m. But the broader index was down 0.9 percent for the week, heading for its first weekly decline in four.

The Sensex was up 0.6 percent.

Bargain-hunting lifted most blue chips, with Larsen & Toubro Ltd up 0.8 percent after falling in three of the four previous sessions.

Meanwhile, interest rate-sensitive firms rose, with ICICI Bank up 0.7 percent.

But among losers, Oil and Natural Gas Corp fell as much as 4.5 percent after posting disappointing earnings in the previous session.

(Reporting by Neha Dasgupta; Editing by Subhranshu Sahu)