* NSE index up 0.56 pct, BSE index 0.50 pct higher
* Indian shares up for third session in four
* United States-North Korea summit outcome awaited
By Jessica Kuruthukulangara
June 11 (Reuters) - Indian shares rose on Monday and were headed for their third session of gain in four, driven by state-run lenders such as State Bank of India (SBI) after the government set up a panel to explore mechanisms for resolving the burgeoning bad debts plaguing the financial sector.
The panel will examine whether banks needed to set up an asset reconstruction company (ARC) or asset management company to take up the stressed assets from banks’ balance sheets.
This is seen as positive, said Siddhartha Khemka, head of retail research, Motilal Oswal Securities.
Sentiment was also lifted by gains in Asian stocks ahead of a United States-North Korea summit that might ease regional tensions.
“There is expectation that some resolution will happen regarding U.S. and North Korea, which is a positive development on the geopolitical front,” Khemka said.
Investors also await May inflation data due on Tuesday for further cues about the local economy.
Retail inflation likely jumped further in May to a four-month high, primarily driven by a surge in energy prices, according to a Reuters poll of economists, suggesting more policy tightening from the central bank is coming.
The broader NSE index was up 0.56 percent at 10,828.30 as of 0631 GMT, while the benchmark BSE index was 0.50 percent higher at 35,620.54.
The Nifty PSU bank index gained as much as 1.9 percent to a two-month high. SBI rose 2 percent to its highest since Feb. 26, while Punjab National Bank jumped 4.7 percent.
The Nifty pharma index gained 2.1 percent, boosted by Sun Pharmaceutical Industries Ltd after the U.S. health regulator issued a “voluntary action indicated status” for the company’s Halol plant.
Inox Wind Ltd dropped 8.6 percent to a record low after the company said its auditors Patankar & Associates (P&A) resigned, citing “time constraints”.
PNB Housing Finance Ltd fell 6.3 percent after the Economic Times newspaper reported U.S. private equity firm Carlyle Group was looking to sell its stake in it. (Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Subhranshu Sahu)