Sensex up on reform hopes; head for second weekly gain

MUMBAI (Reuters) - India's stock markets edged higher on Friday in a volatile session as energy firms such as Reliance Industries rallied after the country simplified oil and gas licensing rules, while property developers gained after parliament passed a real estate bill.

The reforms raised hopes the government would take further measures after key parts of its legislative agenda, including a revamp of the goods and services tax (GST), had been stuck in parliament. The government controls the lower house of parliament but not the upper.

The broader NSE Nifty was tentatively headed for a weekly gain of 0.1 percent, its second consecutive weekly advance, marking a revival in sentiment after the government stuck to its fiscal deficit target for next year in the budget unveiled on Feb. 29.

But recent outperformers such as Bharti Airtel fell as investors booked profits, capping broader gains.

Arun Kejriwal, a director at Kris Research, said he was encouraged the government was starting to bring to reality some of the measures it had discussed over the last two years.

"The upper house of parliament is functioning, and some key bills have been passed. Expect GST to be passed after recess (next month)," Kejriwal said.

The broader NSE Nifty was up 0.1 percent at 0835 GMT, while the benchmark BSE Sensex gained 0.2 percent.

Among gainers, Reliance Industries rose 0.45 percent after India on Thursday simplified oil and gas licensing rules in a bid to unlock $40 billion in oil and gas output.

Property developer DLF advanced 0.6 percent after India's upper house of parliament passed a bill on Thursday to regulate the real estate sector.

The legislation could protect home buyers and ensure the timely execution of projects to boost investor confidence and stamp out illegal practices.

Meanwhile, Interglobe Aviation Ltd , the operator of India's largest carrier IndiGo, jumped 2.4 percent after saying it had taken delivery of its first Airbus A320 Neo aircraft.

But investors also booked profits in recent outperformers, with Bharti Airtel falling 0.2 percent after gaining 2.1 percent over the previous three sessions.

(Reporting by Manoj Rawal; Editing by Sunil Nair)