Sensex heads for longest winning streak in nearly five months

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MUMBAI (Reuters) - The BSE Sensex rose on Tuesday, heading for an eighth straight session of gains, its longest winning streak in nearly five months, on renewed optimism over Greek debt talks, while state-run banks increased on hopes of capital infusion.

Risk-on sentiment in global markets also aided local shares after Greece's latest budget proposals raised hopes it would stave off a debt default and reach a deal with lenders later this week.

India plans to inject about $3 billion into state-owned banks this fiscal year, and potentially $6 billion next year, to help recapitalise the sector and allow it to meet Basel III rules, Finance Secretary Rajiv Mehrishi told news channel CNBC-TV18.

Hopes monsoon may help the Reserve Bank of India cut rates in October than in 2016, as anticipated earlier after delivering three cuts of 25 basis points each in 2015, so far, also helped.

"Fair conclusion of Greece debt issue and kindness of rain gods can continue to bode well for equities and the economy," said Deven Choksey, managing director at K R Choksey Securities.

The 30-share BSE index gained 0.35 percent, heading for its longest gaining streak since the eight-session rally to Jan. 27, while the 50-share Nifty rose 0.4 percent.

State-run banks led gains on the NSE index, with Punjab National Bank rising as much as 4.9 percent and Bank of Baroda increasing up to 2 percent.

The NSE sub-index for banking stocks rose 2.9 pct, on track for its biggest daily gain since March 2.

Among other blue-chips, Larsen & Toubro rose 2.1 percent, while ITC gained 1.2 percent.

(Reporting by Abhishek Vishnoi; Editing by Subhranshu Sahu)