BENGALURU: Indian shares surged 1% on Monday, with private lender HDFC Bank and mortgage lender Housing Development Finance Corp leading gains after the companies decided to merge their operations.

The NSE Nifty 50 index was up 1.1% at 17,864, as of 0348 GMT, and the S&P BSE Sensex rose 1.1% to 59,917.24.

Shares of HDFC Ltd and HDFC Bank were up 7% and 6.4%, respectively, after the companies decided to merge.

The Nifty bank index rose 2.3%, while the finance index gained 3.1%.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Rashmi Aich)