By Tanvi Mehta and Suvashree Choudhury
(Reuters) - Indian shares edged up on Wednesday as a stronger rupee buoyed sentiment, while investors pinned their bets on hopes of a second term for the current government in the next elections.
The Indian rupee gained as much as 0.47 percent to hit 69.9500 against the dollar, a level last seen on Jan. 8. The 10-year benchmark bond yield rose marginally to 7.5792 compared with its previous close of 7.5723.
"Rupee has been appreciating against the dollar due to strong equity inflows for the past few days. It also seems that the RBI has been on the sidelines and not intervened aggressively which is adding to the appreciation of the currency," said Sajal Gupta, head of forex and rates at Edelweiss Securities.
The Indian rupee's weak start to 2019 is an indication of how it will perform over the coming year, strategists in a Reuters poll said, citing uncertainty ahead of a general election in May and a potential trade conflict with the United States.
A stronger rupee boosted sentiment in the country, where geopolitical tensions had dampened the mood last week.
"Market sentiment is improving more because of expectation that the BJP (Bharatiya Janata Party) government will return to power. Market is doing well other than index stocks... Large caps have opportunity, but mid-caps are performing well," said Deven Choksey, founder, KR Choksey Investment Managers.
The broader NSE Nifty was unchanged at 11,053.40 as of 0528 GMT, with gains in industrial and energy stocks, while the benchmark BSE Sensex was 0.15 percent higher at 36,691.65.
Larsen & Toubro Ltd was the top contributor to the index, rising as much as 3.1 percent to 1,357.3 rupees, its highest since Jan. 16.
Telecom stocks gained, with Vodafone Idea Ltd up 5.6 percent while Bharti Airtel Ltd was trading 0.6 percent higher.
Airtel's promoter Singapore Telecommunications Ltd is set to more than double its stake in Bharti Airtel as part of the Indian telecoms operator's plan to raise $4.6 billion through new shares and bonds.
The Nifty Mid-cap 100 index rose for the sixth straight session, gaining as much as 0.3 percent.
However, losses in Indian Oil Corp Ltd and Zee Entertainment Enterprises Ltd capped gains on the NSE index.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Rashmi Aich)