Sensex, Nifty rise on monsoon progress, corporate earnings

REUTERS - Indian shares rose on Monday as solid earnings from market heavyweight Reliance Industries Ltd sparked hopes about corporate earnings, while sentiment was also buoyed by above-average monsoon rains.

Reliance Industries on Friday posted first-quarter profit above expectations on higher margins from its core refining business, lifting the mood after software services exporter Infosys warned it wouldn't make its revenue target for the fiscal year.

Above-average monsoon rains have been driving the market recently, with the broader NSE index gaining 22.2 percent from a near two-year low hit on Feb. 29.

Investors are also keeping a close watch on the monsoon session of parliament which started on Monday amid hopes the government will be able to pass the goods and services tax bill that is now stuck in the Rajya Sabha.

"Monsoon is a factor as long-term investors are taking bets on core economy-related stocks - infrastructure, metals, PSU banks," said Shrikant Chouhan, senior vice president - equity technical research at Kotak Securities, adding the market was doing well in spite of weakness in IT stocks and underperformance of pharma shares.

"Investors don't want to go for profit-taking because it is earnings season. This time, they are positive or at least expecting better numbers as compared to previous few quarters."

The broader Nifty was up 0.43 percent at 8,577.80 as of 0627 GMT, while the benchmark Sensex was 0.55 percent higher at 27,989.74.

Reliance Industries was among the leading gainers, rising as much as 2.62 percent.

Hindustan Unilever, Exide Industries and MindTree are among the companies that are scheduled to report later in the day.

Meanwhile, Axis Bank, India's third-biggest private sector lender, rose after the Reserve Bank of India on Friday raised the limit for foreign shareholding in the bank to up to 74 percent.

Sectors such as consumer cyclicals, financials and industrials gained, while technology and telecom services fell.

The Nifty IT Index was flat after falling as much as 4.17 percent on Friday following a cut in annual revenue growth target by Infosys. Infosys, Wipro Ltd and MindTree were down 0.3 percent, 0.97 pct and 2.75 pct, respectively.

(Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu)