Reuters Market Eye - The BSE Sensex and Nifty rose as banks extended gains from the previous session on hopes for a cut in cash reserve ratio, while Larsen & Toubro(LART.NS) and other capital good stocks gained ahead of industrial output data later in the morning.
A rebound in U.S. markets overnight also helped overall risk sentiment after an encouraging start to the U.S. earnings season.
State Bank of India rose 2.1 percent as traders brace for the prospect the RBI will announce a cut in the CRR on, or before, its policy meeting on April 17 to ease a tight liquidity crunch in the sector.
L&T shares rose 1.3 percent ahead of the notoriously volatile industrial output data. A Reuters survey shows analysts expect industrial production to grow 6.6 percent in February from a year ago, slightly lower than in January.
The BSE Sensex was up 0.6 percent, while the Nifty gained 0.7 percent.
(Reporting by Manoj Dharra; Editing by Rafael Nam)