BSE Sensex up on hopes of faster reforms by Modi

MUMBAI (Reuters) - The BSE Sensex and Nifty rose on Wednesday, heading for their second consecutive session of gains, as blue-chips such as ICICI Bank climbed on hopes that Delhi election defeat may prompt faster reforms by the Modi government especially in the budget.

The Aam Aadmi Party, an upstart anti-establishment party crushed India's ruling Bharatiya Janata Party in a Delhi state election on Tuesday, smashing an aura of invincibility built around Prime Minister Narendra Modi since he swept to power last year.

Delhi election defeat may lead Prime Minister Narendra Modi to spur faster activity to ensure the reforms' impact is visible before the next election cycle, investment banks said.

Traders expect Finance Minister Arun Jaitley to boost capital spending and offer tax breaks to an under-performing manufacturing sector in the federal budget on Feb. 28.

"Modi's focus on delivery of projects would increase especially in the infrastructure sector for job creation in the economy," said Deven Choksey, managing director at K R Choksey Securities.

Achieving fiscal discipline and higher revenue would be key in the budget, he added.

The Sensex rose 0.44 percent on Wednesday, while the broader Nifty edged up 0.54 percent.

Blue-chips led the gains, with ICICI Bank Ltd rising 1.8 percent and Larsen & Toubro Ltd gaining 2.3 percent.

Axis Bank Ltd also gained 1.8 percent, while Tata Consultancy Services Ltd rose 1.3 percent.

(Reporting by Abhishek Vishnoi; Editing by Anand Basu)