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* NSE index up 0.03 pct, BSE index 0.1 pct higher
* Banking shares rise on further rate cut hopes
Oct 14 (Reuters) - Indian shares recovered from the previous session's multi-month lows to trade marginally higher on Friday, with financials leading the gains on prospects of further rate cuts after inflation cooled to a 13-month low in September.
However, gains were limited as Infosys shares tumbled as much as 5.3 percent to their lowest since July 20, 2015 after the country's second-largest IT services firm cut its fiscal-year revenue growth target for a second time in three months on an uncertain business outlook.
"I would pencil-in another 25 basis point cut (in repo rate), if not in December then definitely in March, as inflation numbers have come down," said Ravi Sunder Muthukrishnan, head - strategic research group at ICICI Securities.
India's consumer price index rose 4.31 percent last month from a year earlier, its slowest pace since August 2015, helped by moderating food prices. This gives room for the central bank to cut interest rates again if needed.
Banking shares rose, with the Nifty PSU bank index gaining as much as 1.5 percent. State Bank of India was up 1 percent, while Punjab National Bank gained 1.45 percent.
The benchmark BSE index was 0.1 percent higher at 27,672.31 as of 0634 GMT after declining as much as 0.34 percent earlier in the day. For the week, the index was down 1.4 percent.
The broader NSE index was up 0.03 percent at 8,575.75 after falling as much as 0.27 percent earlier in the session.
Among other gainers, Tata Consultancy Services rose as much as 2.4 percent after the country's biggest software services exporter on Thursday posted an 8 percent rise in its September-quarter profit, beating estimates. (Reporting by Aastha Agnihotri in Bengaluru; Editing by Subhranshu Sahu)