India's Sensex advances led by state-owned lenders

Nifty PSU Bank index rose nearly 3 percent on the back of short covering after recent declines.

india trader
Trader walks infront of an electronic board in Mumbai, India. Reuters

Indian shares rose for a second straight session on Thursday, led by a rally in state-owned lenders such as State Bank of India after recent falls.

The benchmark S&P BSE Sensex rose 0.40 percent at 31,369 while the broader Nifty advanced 0.38 percent at 9,674.

Asian equities tread lower after minutes from the Federal Reserve's last meeting showed a lack of consensus about when to shrink the central bank's balance sheet and how to approach policy strategy in a time of low inflation.

Geopolitical risks were exacerbated after North Korea's missile launch raised worries the reclusive nation is planning to build a device to attack mainland United States.

Sentiment back home was, however, positive.

Nifty PSU Bank index rose nearly 3 percent after brokerages upgraded leading state-owned lenders Bank of Baroda and Punjab National Bank as valuations turned reasonable after recent correction.

S&P BSE Realty index jumped 1.6 percent, with stocks such as Prestige Estates, Sobha and Unitech gaining between 4 percent to 7 percent.

Videocon Industries Ltd rose 5 percent. The stock hit upper circuit for seventh consecutive sessions.

Reliance Industries rose 0.1 percent, its fourth consecutive session of gains amidst hopes of improved quarterly earnings.

Consumer durables stocks were among the laggards, with Rajesh Exports falling 2.2 percent, Crompton Greaves shedding 0.4 percent and Whirlpool down 0.8 percent.

Market breadth was in the favour of gainers, with about 2 stocks advancing to every 1 stock that declined.