Sensex hits near three-month high as results outlook brightens

By Tanvi Mehta

(Reuters) - Indian shares hit their highest in nearly three months on Friday, as expectations of better March-quarter corporate results buoyed investors, with Reliance Industries Ltd and Axis Bank Ltd driving the gains.

Reliance, which is expected to report a higher quarterly profit later in the day, rose as much as 3.7 percent to an all-time high and was the biggest driver of gains on the NSE index.

Results from private sector lenders Axis Bank and Yes Bank also set the tone for the season, with investors upbeat about March-quarter numbers.

Yes Bank Ltd gained as much as 4.7 percent after its fourth-quarter profit beat estimates, while positive management guidance helped Axis Bank shares gain nearly 6 percent, although it reported its first ever quarterly loss.

"A larger part of the financial story is that banks have come up with interesting set of numbers, so market has started buying these companies... Earnings outlook looks quite different from what it was in the last quarter," said Deven Choksey, founder of KR Choksey Investment Managers.

The broader NSE Nifty was up 0.67 percent at 10,688.95 as of 537 GMT, and was set to gain 1.2 percent on week.

The benchmark BSE Sensex was 0.76 percent higher at 34,976.33, and was poised for a weekly gain of 1.6 percent.

Top lender State Bank of India, which rose 5 percent, was the biggest percentage gainer on both the indexes.

The Nifty PSU bank index climbed over 5 percent, its biggest intraday percentage gain since April 5. It had lost 5.8 percent this month as of Thursday's close.

IT stocks, however, lost ground, with the Nifty IT index down 1.5 percent.

(Reporting by Tanvi Mehta in Bengaluru; Editing by Biju Dwarakanath)