MUMBAI (Reuters) - The BSE Sensex and Nifty edged higher on Wednesday, marking their highest level in nearly 1-1/2 months, after oil explorers rose tracking a rebound in crude oil prices while auto stocks gained on hopes the upcoming festive season would boost sales.
Gains also tracked higher Asian stocks which hit a seven-week high on Wednesday as oil prices showed some signs of life, supporting battered resource shares and emerging economy currencies.
A tactical rally in emerging markets on some stability in China PMI and weak U.S. jobs data pushing Fed rate hike expectations to March 2016 are also seen helping sentiment.
The upcoming earnings reporting season with Infosys due to post July-September results on Oct. 12, and macro data including inflation, industrial output next week would be key domestic data points to watch in the near term.
"Margin expansion would continues to benefit mid-caps in September quarter results while macro data points would continue to showcase marginal improvements," said G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
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The Sensex was trading 0.46 percent higher while the Nifty was up 0.35 percent after earlier marking their highest level since Aug. 21.
BSE's oil and gas index was up 0.6 percent while the sub-index for auto stocks rose 0.9 percent.
Oil and Natural Gas Corp rose 2.5 percent, Cairn India gained 3.8 percent, Vedanta was up 5.7 percent while Oil India was 2.4 percent higher.
Among auto stocks, Maruti Suzuki rose 1.8 percent and Bajaj Auto gained 2 percent.
Tata Motors rose 1.8 percent, heading towards a fifth day of gains in six, on data and news pointing towards likely improvement in business prospects in India and abroad.'
However, power sector lenders fell for a second consecutive session on profit-taking after Monday's sharp surge on hopes the government would soon announce power distributors' restructuring.
Power Finance Corp fell 2.3 percent while Rural Electrification Corp lost 2.9 percent.
(Reporting by Abhishek Vishnoi in Mumbai; Editing by Sunil Nair)
