* NSE index up 0.36 pct, BSE index up 0.34 pct
* Retail inflation eases for a second straight month
* TCS biggest loser on the indexes
By Krishna V Kurup
March 13 (Reuters) - Indian shares edged higher on Tuesday, with financials accounting for over half the gains, as easing retail inflation allayed concerns of a rate hike in the near term.
India’s retail inflation eased to 4.44 percent in February from 5.1 percent in January, but remained above the 4 percent medium-term target of the Reserve Bank of India.
Analysts, however, said retail inflation could accelerate to 6 percent by June and may remain at 5 percent to 6 percent in the financial year that begins on April 1, leading to pre-emptive monetary tightening.
The broader NSE index was up 0.36 percent at 10,458.85 as of 0541 GMT, while the benchmark BSE index rose 0.34 percent to 34,034.01.
Financial stocks led the gains on the gains, with the Nifty PSU bank index rising as much as 3.8 percent. Punjab National Bank rose 4.2 percent and Andhra Bank gained 5.9 percent.
“PSU (public sector) banks have been oversold, having been battered down so badly, so some sort of bounce was due and the CPI (data) coming in at a soft level became a trigger for the rise as it could lead to some pressure on RBI to re-look the interest rates,” said Deepak Jasani, head of retail research at HDFC Securities.
Meanwhile, IT stocks declined led by Tata Consultancy Services, which posted its biggest intraday pct fall since Nov. 2016 after a term sheet showed that parent Tata Sons is set to sell a stake in the company. (Reporting by Krishna V Kurup in Bengaluru; Editing by Sunil Nair)