MUMBAI: India's NSE share index rose nearly 2 percent on Wednesday to its highest intraday level since January 2011 as lenders such as ICICI Bank rallied on rising rate cut hopes after the central bank governor said he was taking note of falling inflation.

India's central bank will take note of falling inflation when discussing potential interest rate cuts, Reserve Bank of India Governor Duvvuri Subbarao said on Tuesday, adding he was very happy about the falling inflation.

The comments come after data on Tuesday showed headline wholesale inflation fell below 5 percent in April, dropping within the central bank's comfort zone.

ICICI Bank Ltd gained 2.3 percent, while HDFC Bank rose 2.5 percent.

The NSE index gained 1.9 percent, after earlier hitting its highest intraday level since January 2011.

The benchmark BSE index was also up 1.9 percent.

(Agencies)

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