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* NSE index up 0.2 pct, BSE index 0.1 pct higher
* Both indexes head for 3rd straight weekly gain
* SBI bounces back ahead of quarterly results
By Arnab Paul
Feb 10 (Reuters) - Indian shares edged up on Friday, heading for a third straight weekly gain, as lenders rebounded from disappointment over the central bank's decision to hold rates while sentiment also got a boost after Asian shares hit an 18-month peak.
MSCI's broadest index of Asia-Pacific shares outside Japan rose to its highest since July 2015, on upbeat Chinese trade data and U.S. President Donald Trump's announcement of tax incentives to help businesses.
"I feel it's post-budget buying, taking place in certain counters," said Deven Choksey, managing director at KR Choksey Shares and Securities.
"Till the end of March we might see this sort of buying taking place and I don't see any major correction in this period."
The broader NSE index was up 0.2 percent at 8,795.90 as of 0608 GMT, on track for a third consecutive session of gains, while the benchmark 30-stock BSE index was 0.1 percent higher at 28,354.70.
The BSE index has gained 0.4 percent so far this week and the NSE index has added 0.6 percent, on hopes of an improving economy despite disappointment about the Reserve Bank of India's decision on Wednesday to keep the policy rate on hold and the unexpected change in stance to "neutral" from "accommodative".
Banking stocks were the biggest gainers on Friday with the Nifty bank index rising as much as 0.8 percent. State Bank of India Ltd climbed as much as 1.8 percent ahead of its quarterly results later in the day. It had closed 0.5 percent lower in the previous session.
IT companies were also in the green with Tata Consultancy Services Ltd and Infosys Ltd gaining as much as 1.4 percent and 0.9 percent, respectively. The Nifty IT index rose as much as 0.9 percent, heading for a third straight gain.
Grasim Industries Ltd hit four-month highs after U.S. index provider MSCI added the company to its Emerging Markets index on Thursday. (Editing by Subhranshu Sahu)