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* NSE index up 0.49 pct, BSE index 0.43 pct higher
* Cement makers rise; Ambuja Cements up nearly 10 pct
* Nifty PSU bank index up 1.5 pct
By Samantha Kareen Nair
May 8 (Reuters) - Indian shares rose on Monday led by a rally in Ambuja Cements and ACC Ltd after the companies said they were exploring a merger, while lenders extended gains after the government further empowered the central bank to tackle bad debts in the sector.
Sentiment was also boosted by a rise in Asian stocks on investor relief after centrist Emmanuel Macron comfortably won the French presidential election. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 percent, snapping a three-day losing streak.
Broader gains were capped as investors awaited corporate results in the days ahead, including from Bharti Airtel Ltd on Tuesday and Hero MotoCorp Ltd on on Wednesday.
"While the French elections is also lifting market sentiment, Indian banks continue to show positive trend. Generally, markets will now react to the last bit of corporate results that are expected," said Neeraj Dewan, director at Quantum Securities.
The broader NSE index was up 0.49 percent at 9,330.35 as of 0535 GMT, while the benchmark BSE index was 0.43 percent higher at 29,986.18 percent.
Ambuja Cements rose as much as 9.9 percent after the company said on Friday it was considering the merits of a merger with its subsidiary ACC Ltd. ACC was up 5.8 percent.
"The merger makes sense because it will create a much larger entity that could take over UltraTech Cement in terms of market share. Some positive synergies such as lower costs are also expected from the combination," Dewan added.
Banks continued to gain as India tweaked its laws last week to help tackle a record $150 billion in bad loans. The government authorized the Reserve Bank of India to direct banks to initiate an insolvency resolution process in the case of a default under provisions of the bankruptcy code.
The Nifty PSU Bank index climbed more than 1.5 percent. State Bank of India gained as much as 1.6 percent while Bank of India and Bank of Baroda rose more than 2 percent each. (Reporting by Samantha Kareen Nair in Bengaluru; Editing by Sunil Nair)