Sensex extends gains for sixth session; rate sensitives lead

MUMBAI (Reuters) - The BSE Sensex rose for a sixth consecutive session on Wednesday, as interest-rate sensitive stocks such as ICICI Bank gained on hopes of rate cuts by the Reserve Bank of India due to slowing inflation and reforms in the upcoming budget would aid credit growth.

India's wholesale prices declined an annual 0.39 percent in January, while retail inflation for January stayed well below the central bank's target, data showed, bolstering prospects for further interest rate cuts.

Investors are hopeful of faster reforms in the government's 2015/16 fiscal budget, due to be presented on Feb. 28, after Prime Minister Narendra Modi's Bharatiya Janata Party was routed in the Delhi state elections.

 

"Government has no choice but to go for reforms and the RBI is expected to reward that with further rate cuts," said G. Chokkalingam, founder of Mumbai-based research and fund advisory firm Equinomics.

The broader Nifty was up 0.53 percent, while the benchmark BSE Sensex gained 0.58 percent.

Financial stocks led the gains, with the NSE Bank index rising 0.4 percent.

ICICI Bank gained 1.2 percent, HDFC Bank rose 0.7 percent, Kotak Mahindra Bank was up 0.8 percent and Axis Bank was 0.4 percent higher.

(Reporting by Abhishek Vishnoi; Editing by Prateek Chatterjee)