INDIA STOCKS-Indian benchmarks inch higher; caution prevails ahead of US tariffs

By Vivek Kumar M and Bharath Rajeswaran

April 2 (Reuters) - India's benchmark indexes inched higher in early trades on Wednesday, driven by bank stocks, but uncertainty over the size and scope of U.S. President Donald Trump's reciprocal tariffs kept gains in check.

The NSE Nifty 50 .NSEI rose 0.27% to 23,228.9, while the BSE Sensex .BSESN traded 0.45% higher at 76,366.51 as of 10:17 a.m. IST.

Both benchmark indexes recorded their biggest daily percentage drop in a month on Tuesday, as the uncertainty over the size and scope of the reciprocal tariffs raised fears of global trade war intensifying.

The White House has said the tariffs will take effect immediately after Trump announces them on Wednesday, which is 1:30 a.m. IST on Thursday.

The benchmark Nifty 50 is down 11.5% from its record high levels hit in late September due to worries over U.S. tariffs, slowing domestic earnings growth and foreign outflows.

"We are also entering the results season and in the midst of RBI monetary policy. So, it is not only tariff, but there are other factors which are coming together and need to be watched," said Anita Gandhi, founder and head of institutional business at Arihant Capital Markets.

Seven out of 13 sub-sectors gained. Financials .NIFTYFIN rose 0.7% on the day, as investors picked up bargains. ICICI Bank ICBK.NS and HDFC Bank HDBK.NS climbed 1.3% each.

The broader small-caps .NIFSMCP100 were flat, while the mid-caps .NIFMDCP100 were down 0.2%.

Among other stocks, Nestle India NEST.NS and Hindustan Unilever HLL.NS fell 2.4% and 1.4%, respectively, after BofA downgraded the stocks to "underperform" from "neutral" and "neutral" from "buy".

Tata Consumer Products TACN.NS jumped around 6% after Goldman Sachs upgraded it to "buy" from "neutral" on strong earnings growth expectations.

($1 = 85.6100 Indian rupees)