Sensex rises to 1-1/2 month high; earnings to dictate trend

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose for a third consecutive session on Monday and closed at its highest in 1-1/2 months as optimism about upcoming earnings results and in-line wholesale inflation data boosted blue chips.

Headline inflation rose 4.86 percent in June from a year earlier, marking the first pick-up in four months, but investors were soothed as the data came largely in line with expectations.

The wholesale inflation data helped sooth some of the concerns after reports late on Friday showed industrial output unexpectedly contracted in May from a year ago, while retail inflation accelerated.

Investors are also more optimistic about upcoming earnings, including from Tata Consultancy Services , after Infosys retained its dollar revenue guidance last week.

"Going ahead, markets will be influenced by the quarterly results, RBI policy decision as well as economic developments in USA/Europe," said Dipen Shah, head of private client group research, Kotak Securities.

The BSE Sensex rose 0.38 percent, or 76.01 points, to 20,034.48, closing above the psychologically important 20,000 level and marking its highest close since May 30.

The broader Nifty rose 0.36 percent, or 21.80 points, to 6,030.80.

State Bank of India rose 1 percent, while Axis Bank ended 1.3 percent higher after June wholesale inflation data came in line with expectations.

Companies reporting earnings this week largely gained. TCS rose 2 percent, gaining for a fourth day, while Reliance Industries advanced 0.8 percent.

Sterlite Industries ended 3 percent higher after an environmental court said on Monday that a copper smelter plant owned by the company can stay open. The plant was shut for two months from March 30 after complaints from residents over emissions.

SpiceJet surged 7.9 percent even after the airline denied a news report from vccircle.com that Kuwait Airways was looking to pick up a nearly 25 percent stake in the budget airline.

However, among stocks that fell, Infosys fell 2.2 percent on profit-taking after India's No.2 software exporter rose 10.9 percent on Friday, the most in six months. The company had beaten some analysts' expectations by retaining its revenue growth forecast.

TTK Prestige fell 5.9 percent after the company said its net profit fell about 16 percent in the June quarter.

(Editing by Subhranshu Sahu)