Updates for morning trade

By Bharath Rajeswaran

Jan 30 (Reuters) - India's benchmark indexes inched higher on Thursday, led by state-owned companies and non-bank lender Bajaj Finance, while a drop in Tata Motors capped gains.

After opening flat, the Nifty 50 .NSEI advanced 0.56% to 23,290.85 points as of 10:12 a.m. IST, while the BSE Sensex .BSESN gained 0.42% to 76,851.88.

The January futures and options contracts expire on the day and could spur a rise in volatility as traders roll over their positions to the next month.

Twelve of the 13 major sectors advanced. State-owned companies .NIFTYPSE gained about 2%.

"The rise in public sector companies signals market expectations that the government will prioritise infrastructure and public investment in the union budget on Feb. 1," said Aishvarya Dadheech, chief investment officer of Fident Asset Management.

The broader, more domestically focussed smallcaps .NIFSMCP100 and midcaps .NIFMDCP100 increased 1.3% and 0.8%, respectively.

Non-bank lender Bajaj Finance BJFN.NS jumped about 3.1%, leading the financials index .NIFTYFIN 0.5% higher, after posting a bigger quarterly profit due to strong loan growth.

On the other hand, Tata Motors TAMO.NS dropped about 6% after reporting a smaller quarterly profit, weighed down by weak car sales.

Wall Street equities closed lower overnight, while Asian markets were muted on Thursday, after the U.S. central bank stood pat on its rates, as expected. Higher U.S. rates make emerging markets such as India less attractive for overseas investors. MKTS/GLOB

Foreign portfolio investors (FPIs) have offloaded Indian shares worth $8.6 billion in January so far, set for the second-highest monthly outflow on record.

Among individual stocks, Whirlpool of India WHIR.NS tumbled 20% after its parent, Whirlpool Corp WHR.NS said it will reduce its stake in the India unit to about 20% from 51%.

Brigade Enterprises BRIG.NS gained 3% after posting a rise in December-quarter profit on strong demand for luxury homes.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D'Souza)

((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))