(Updates for market close) By Bharath Rajeswaran and Vivek Kumar M Oct 10 (Reuters) - India's equity benchmarks logged their biggest weekly gains in more than three months, driven by IT and bank stocks as buoyant sentiment ahead of the earnings season drew in foreign investors. The Nifty 50 and the BSE Sensex added around 1.6% each this week, marking their best performance in three months. On the day, they rose 0.4% each to 25,285.35 and 82,500.82 points, respectively. Twelve of the 16 major sectors rose during the week. The broader mid-caps and small-caps gained 2.1% and 1.4%, respectively. Foreign investors bought Indian shares worth 18.5 billion rupees ($208.59 million) till Thursday this week amid a narrowing valuation gap with emerging market peers, prospects of an India-U.S. trade deal, and hopes of earnings revival. Indian Prime Minister Narendra Modi said he spoke to U.S. President Donald Trump on Thursday, adding that they "reviewed good progress achieved in trade negotiations". However, foreign investors remain net sellers of Indian equities worth $18 billion so far this year, per the securities depository data. Financials rose 1.6% for the week, following the central bank's lending reforms and better loan growth expectations for the September quarter. "We expect second-quarter earnings growth to be modest due to the late impact of GST reforms but expect revival of earnings from the third quarter onwards on the back of significant above-average monsoon, and various fiscal and monetary measures," said Vinay Paharia, chief investment officer at PGIM India Mutual Fund. IT stocks jumped 4.9% this week, and were the biggest gainers, with Tata Consultancy Services' better-than-expected revenue for the quarter helping push the index higher. However, its plans to set up data centres pulled the stock down 1.1% on Friday. Among individual stocks, Elecon Engineering plunged 7.8% after posting flat profit for the September quarter, while Tata Elxsi lost 3% following a drop in quarterly profit. ($1 = 88.6900 Indian rupees) (Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Sumana Nandy, Sonia Cheema and Janane Venkatraman) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
