Sensex edges higher; easing inflation lifts banks

MUMBAI (Reuters) - The BSE Sensex edged up on Tuesday as lenders such as State Bank of India and Axis Bank gained after a key wholesale inflation index eased to the lowest in more than three years, spurring hopes the RBI would continue to cut interest rates.

Oil and Natural Gas Corp Ltd also gained on hopes the government would allow it to reduce the share of oil price subsidy provided to state refiners.

ONGC provisionally rose 1.9 percent, while State Bank of India ended up 0.7 percent and Axis Bank Ltd rose 1.07 percent.

The BSE Sensex provisionally gained 0.18 percent, while the Nifty ended up 0.25 percent, recovering after posting on Monday their biggest daily percentage falls in about a year. (Reporting by Abhishek Vishnoi; Editing by Rafael Nam)