* Rupee hits strongest vs dollar since Oct. 28, 2015
* NSE index up 0.36 pct, BSE index 0.38 pct higher
* Financial sector contributes most to gains
* Bharti Infratel top gainer on NSE index
By Aby Jose Koilparambil
March 29 (Reuters) - The Indian rupee hit its strongest level against the dollar in nearly 1-1/2 years while shares edged up on Wednesday as strong foreign investments into the country continued, although broader gains were capped ahead of earnings results.
Foreign investors have bought a net $6.91 billion in debt and equities so far this month on hopes of an improving economy and optimism over Prime Minister Narendra Modi's reform process after his victory in the key northern state of Uttar Pradesh.
But whether gains can sustain will likely hinge on earnings results, due to start in April, and the global risk environment, according to analysts.
"There are two factors that continue to keep the markets up. Both domestic and FII flows have been extremely strong. If the flows continue to be there at that extent, markets tend to look up," said R Sreesankar, co-head, Institutional Equities at Prabhudas Lilladher Pvt. Ltd.
The rupee rose to as high as 64.91 per dollar, its strongest level since Oct. 28, 2015 and was last trading at 64.94/95, compared with its 65.0350 close on Monday. Debt and currency markets are closed on Tuesday for a bank holiday.
The broader NSE index was up 0.36 percent at 9,133.40 by 0600 GMT, while the benchmark BSE index was 0.38 percent higher at 29,522.02.
The Nifty Finance index gained for the fourth session in five amid hopes the sector could benefit from an improving economy.
Index heavyweight State Bank of India gained as much as 2.18 percent while Axis Bank rose as much as 2 percent.
The Nifty Bank index hit a record high in morning trade, with Bank of India gaining 2.5 percent and Canara Bank trading about 2 percent higher.
Bharti Infratel rose as much as 7 percent to be the top gainer on the NSE index after promoter Bharti Airtel completed a transfer of 11.32 percent stake in its telecom tower unit to Nettle Infra Investments Ltd. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sunil Nair)