By Samantha Kareen Nair
(Reuters) - Indian shares rose on Thursday, tracking gains in regional markets on upbeat global economic data and an overnight bounce in oil prices, with investors cautiously optimistic ahead of quarterly results and the federal budget.
MSCI's broadest index of Asia-Pacific stocks outside Japan rose more than 1 percent, extending a rally that has seen it gain 2 percent in the opening days of 2017.
India's benchmark BSE Sensex hit its highest in nearly two months, while the broader NSE Nifty hit a near one-month high.
Traders said the Indian market would ultimately be driven by corporate earnings, with Tata Consultancy Services and Infosys scheduled to post their quarterly results on Jan. 12 and Jan. 13, respectively.
India is also gearing up to its annual budget, and investors hope Prime Minister Narendra Modi's government would keep spending under control and promote growth after its move to ban higher-value banknotes paralysed large parts of the economy.
"The budget is expected to be fiscally disciplined, with hopes that the government may take measures to boost economic recovery post the demonetisation impact," said Tirthankar Patnaik, India strategist at Mizuho Bank.
"The key driver for markets will be earnings growth. Due to the impact of demonetisation, we believe that earnings growth numbers will pare down initially."
The broader NSE index was up 0.92 percent at 8,266.4 as of 0626 GMT, after touching its highest since Dec. 9 earlier in the session.
The benchmark Sensex was 0.87 percent higher at 26,865.1, after hitting its highest since Nov. 11.
All sectors on the NSE index rose, with financials and auto stocks gaining the most. ICICI Bank and State Bank of India rose more than 1 percent, while Tata Motors and Hero MotoCorp rose over 3 percent and 2 percent, respectively.
(Reporting by Samantha Kareen Nair in Bengaluru; Editing by Amrutha Gayathri)
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