Sensex heads for 4th session of gains, but mood cautious

MUMBAI (Reuters) - Indian stock markets edged up on Monday, heading for a fourth consecutive winning session, as energy firms such as Reliance Industries gained after oil prices recovered from steep losses in the previous session.

Data showing a fall in the number of U.S. rigs in use lifted crude prices, although analysts warned general oversupply would likely continue to keep the market weak.

Sentiments also improved in the region after China shares jumped as investors welcomed Beijing's decision to replace the top securities regulator and on signs that the government was stepping up its economic stimulus efforts.

But analysts warn any gains in shares could be limited ahead of the government's 2016/17 budget due on Feb. 29. Investors hope policymakers will deliver a fiscally responsible budget that nonetheless steers spending to key areas such as infrastructure.

Parliament is due to start a new session on Tuesday amid growing worries about the government's stalled reform agenda such as a revamp of the goods and services tax (GST).

"The forthcoming week until the budget will be very critical in setting the tone of the market going forward. In case we see the parliament getting disrupted, markets may correct," said Samrat Dasgupta, CEO of Esquire Capital Investment Advisors.

"However, if the Parliament proceeds normally, hopes of GST and a decent budget can spur the Nifty index another 2-3 percent upward from current levels."

The Nifty was up 0.29 percent at 0650 GMT, while the BSE Sensex rose 0.26 percent.

Both indexes were headed for a fourth consecutive session of gains, matching the four-session rising streak in mid-December.

Energy and mining firms were among leading gainers, with Reliance Industries up 2 percent and Oil and Natural Gas Corp up 1.5 percent.

Shares of Aditya Birla Nuvo rose 1.4 percent and Idea Cellular gained 0.8 percent after the companies said they would jointly set up a payments bank.

Cement makers gained on hopes the budget would increase spending on infrastructure. UltraTech Cement rose 2.2 percent.

Among laggards, ITC fell 2.2 percent on worries the government would raise excise duties for cigarettes in its 2016/17 budget.

Maruti Suzuki dropped 1.4 percent after the country's biggest carmaker by sales suspended production in north India amid protests by a local community seeking reservation in education and government jobs.

(Reporting by Aastha Agnihotri; Additional reporting by Manoj Rawal; Editing by Subhranshu Sahu)