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BENGALURU - Indian shares rebounded from near two-month lows on Friday, driven by gains in beaten-down bank stocks, after fears over the economic impact of surging infections in the country led to sharp selling in the past two sessions.

The blue-chip NSE Nifty 50 index and the benchmark S&P BSE Sensex rose 1% each to 14,468 and 48,901, respectively, as of 0524 GMT. Both the indexes had fallen more than 3% in the last two sessions.

"There is some rebalancing in portfolios ahead of the new financial year (in India) ... The U.S. jobs data has also had something to do with reviving risk appetite," said Anand James, chief market strategist at Geojit Financial Services in Kochi.

U.S. Labor Department data showed claims for unemployment benefits dropped to a one-year low last week, a sign that the U.S. economy is on the verge of stronger growth as the public health situation improves.

Also boosting sentiment, Asian shares rebounded on optimism about a global economic recovery.

However, there are worries lingering due to the emerging of new virus strains and their impact on economic growth, James said.

India's daily COVID-19 cases hit a five-month high on Thursday. The country this week reported a new variant of the coronavirus, termed as "double mutant" in more than 200 samples in the hardest-hit western state of Maharashtra.

The Nifty bank index rose 1.2% on Friday, having fallen nearly 6% in the past two weeks.

Kalyan Jewellers' shares shares fell as much as 16.2% at their market debut in Mumbai after the company saw tepid subscription in its initial public offering.

Shares of cable TV and broadband service providers Hathway Cable & Datacom Ltd and DEN Networks Ltd fell as much as 8.22% and 6.25%, respectively, after Reliance Jio said it plans to sell a stake in the companies.