By Tanvi Mehta
(Reuters) - The Sensex and Nifty rose for a second consecutive session on Tuesday, as expectations of good earnings lifted industry heavyweights such as HDFC Bank Ltd and Infosys Ltd ahead of their results later in the day.
Shares of HDFC Bank and Infosys gained 0.4 percent each. Earnings so far for the July-Sept quarter have proved to be solid, lifting indexes to record highs earlier this month.
Investors have been eagerly awaiting the last quarter's results after strong gains in share markets this year pushed valuations for the NSE index's price-to-earnings (PE) ratio to 21.3, well above the historic five-year average of 16.8.
The results also come at a time when the economy has slowed to a more than three-year low due the lingering impact of a ban on high-value currency notes late last year and the rollout of a national goods and services tax.
"People are expecting earnings to match the valuations this quarter," said Jayant Manglik, president, Religare Securities.
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"This will be a litmus test for financial stocks to see the final effect of demonetization."
The Nifty was up 0.35 percent at 10,220.85 as of 0539 GMT, driven by HDFC Bank and ICICI Bank Ltd.
The Sensex was 0.33 percent higher at 32,614.44.
Oil and Natural Gas Corp. Ltd was the top percentage gainer on the NSE index, rising as much as 3.2 percent to its highest in over four months.
The Nifty PSU bank index was trading 1.1 percent higher, having fallen 1.4 percent this month, up to Monday's close.
Indiabulls Housing Finance Ltd's shares rose as much as 2.1 percent after its second-quarter profit jumped nearly 26 pct and at least two brokerages raised their target price.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Sunil Nair)
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