By Manoj Dharra
MUMBAI (Reuters) - The Sensex and the Nifty gained for a third consecutive session on Monday to two-year highs on rising optimism about corporate profits after Reliance Industries and ITC became the latest blue chips to post better-than-expected earnings.
Conglomerate Reliance Industries Ltd
Earnings will continue to set the tone in Indian markets, with Larsen & Toubro Ltd
The solid results have come after Indian markets posted decent gains this month, buoyed by expectations of interest rate cuts from the RBI. The government's fiscal consolidation measures, including raising diesel prices last week, have also supported shares, sparking continued foreign investor buying.
"Signs are encouraging so far for earnings season, but a lot of infrastructure and PSU stock are yet to announce," said Sonam Udasi, head of research at IDBI Capital.
"RBI policy can kick start sentiment in a way but more importantly it will be how policy makers will be able to manage in budget and deficit targets," Udasi added.
The Sensex rose 0.31 percent, or 62.78 points, to end at 20,101.82, its highest close since January 6, 2011.
The Nifty rose 0.3 percent, or 17.90 points, to end at 6,082.30, its highest close since January 4, 2011.
January futures contract on India's 50-stock index breached 6,100 points earlier in the day, marking the first time a near-month index futures contract rose over that level since January 6, 2011. The contract ended at 6,097.90 points.
Reliance Industries Ltd
Among other companies that reported earnings recently, ITC gained 1.43 percent after it beat estimates on Friday with a 21 percent rise in quarterly profit as cigarette volumes improved after four quarters of stagnant growth.
Shares in Reliance Communications Ltd
Budget carrier SpiceJet
The improved earnings also boosted rival Jet Airways
"SpiceJet's result offers a very positive read-through for Jet's 3Q results," IIFL said in a note.
Shares in Hindustan Unilever
Among shares that fell were Housing Development Finance Corp (HDFC)
Shares in Mahindra & Mahindra
(Additional reprting by Abhishek Vishnoi; Editing by Jijo Jacob)