Sensex rises for fourth straight quarter; earnings key

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex and Nifty edged higher on Tuesday, marking their fourth consecutive quarterly gain as blue chips rose on hopes upcoming earnings and auto sales will show the economy remains on the mend, while the Reserve Bank of India's (RBI) decision to keep rates unchanged had little impact.

The Nifty rose just 0.07 percent for September, enough to mark its fifth consecutive month of gains, but still ended up 4.64 percent for the July-September quarter on continued hopes that Prime Minister Narendra Modi would spark a revival in the economy and in domestic investments.

Meanwhile, the Sensex fell 0.03 percent for the month, breaking seven months of consecutive gains, but advanced 4.8 percent for the quarter.

Gains have also been driven by the RBI's strong commitment to curb inflation, although traders say an excessive focus on curbing consumer prices could imperil economic growth.

The RBI on Tuesday kept interest rates unchanged as widely expected and said it would refrain from cutting interest rates until it was confident that consumer inflation can be reduced to a target of 6 percent by January 2016.

"The RBI policy uncertainty is over. The market is now looking forward to earning reports. We expect July-September earnings to grow by 15 percent compared with 7 percent in the previous year," said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance.

The Sensex rose 0.13 percent, or 33.40 points, to end at 26,630.51.

The Nifty edged up 0.07 percent, or 5.90 points, to end at 7,964.80.

Pharmaceutical exporters led the gainers for the month and the quarter. Cipla rose 21.9 percent in September and 43.5 percent for the July-September quarter. Lupin Ltd rose 8.6 percent for the month and 33.1 percent for the quarter.

Blue-chip stocks led the gainers on Tuesday. Housing Development Finance Corp rose 2.3 percent, while ITC Ltd ended up 1.1 percent.

Reliance Industries rose 1.3 percent and Sun Pharmaceutical Industries ended up 2.6 percent.

Auto stocks rose ahead of monthly sales figures. Maruti Suzuki India ended 1.8 percent higher and Bajaj Auto rose 2 percent.

Housing Development & Infrastructure gained 1.9 percent after the company said on Monday its promoters revoked all shares earlier pledged with IL&FS Trust Co Ltd.

Business process outsourcing company HOV Services surged 6 percent, adding to Monday's 20 percent jump after the company said on Monday SourceHOV Holdings Inc, in which it holds a minority stake, will merge with BancTec Group LLC.

However among stocks that fell, metal shares declined on weak China factory output data. Tata Steel ended down 1.6 percent while Hindalco Industries lost 1.9 percent.

(Editing by Anand Basu)