The earnings season got off to a weak start with IT major Infosys Ltd issuing a lower-than-expected revenue guidance last week, but analysts still see signs of positive results this quarter.
"The start was not good, led by IT, but some signs are coming in that this quarter is going to be good," said Vinod Nair, head of research at Geojit Financial Services.
"Expectations about quarterly results have started building up. Investors are expecting some improvement in terms of growth rates during Q4 compared to Q3," said Dipen Shah, senior vice president and head of private client group research, Kotak Securities. He added that PSU banks are expected to perform better.
The Nifty PSU bank index gained up to 2.47 percent, touching its highest since August 2015.
The broader NSE Nifty was up 0.75 percent at 9,208.90 by 12.20 pm, while the benchmark BSE Sensex was 0.78 percent higher at 29,643.15.
Financials contributed to the majority of gains on the NSE index with ICICI Bank Ltd and HDFC Bank Ltd leading, up 3.13 percent and 1.27 percent, respectively.
Punjab National Bank and Bank of Baroda Ltd rose about 3 percent each on a media report that the government was working on next round of consolidation which could see both banks taking over smaller lenders.
Reliance Industries Ltd was among the top gainers, rising as much as 1.3 percent to Rs 1,410, surpassing Tata Consultancy Services' market capitalisation for a brief moment to become India's most valued company.
Gruh Finance Ltd jumped as much as 8.06 percent after the housing finance company posted a 26 percent rise in March-quarter net profit after tax on Monday.
© Thomson Reuters 2017
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