Indian markets gained over 1% on Thursday after a dovish Federal Reserve signaled a prolonged pause in its latest policy statement. Also better-than-expected earnings from Axis Bank and ICICI Bank also cheered the investors. At 11.29 am, the Sensex was trading at 35993.33, up 1.13% or 402 points higher, while the Nifty climbed 0.9% to 10,747.55.

Overnight, the Federal Reserve signaled it is done raising interest rates for at least a while and will be flexible in reducing its bond holdings. Traders will now focus on jobs data which will be out on Friday.

Domestically, traders awaiting fiscal deficit data for April-December and revised annual gross domestic product estimate for fiscal year 2018 due later today. Traders will also watch the interim budget, scheduled to be presented tomorrow.

"Budget could give some indication of the government's commitment to fiscal consolidation, which is one of the main sensitivities in the sovereign rating", says Fitch Ratings. “Higher pre-election spending could risk a second consecutive year of fiscal slippage relative to the government's targets and would further delay plans to reduce the high general government fiscal deficit and debt burden," Fitch Rating said in a note.

Of the 20 NSE Nifty 50 Index companies that have announced results so far, 13 have either met or exceeded analyst estimates, Bloomberg reported.

Axis Bank posted robust performance as bottomline jumped 131% year on year at 1,680 crore, ahead of analyst estimates, on the back of non-interest income growth of 54% year on year and net interest income (NII) of 5,600 crore vs expectation of 5,400 crore. Gross slippage at 3700 crore for the quarter was largely in line with expectations.

"We believe that the bank is closer to the end of its stress loan recognition cycle, which along with improving PCR clearly indicates sharp moderation in credit cost in FY20E. The contingent provisioning on residual stressed loans is also expected to limit incremental provisions on these. Looking ahead, we expect the bank to deliver sustained improvement in operating metrics led by dwindling headwinds on asset quality, improvement in capital efficiency and higher balance sheet growth," Reliance Securities said in a note.

ICICI Bank has also reported a decent performance in December quarter with NII, pre-provision operating profit (PPOP) and PBT growing by 23%, 22% and 28%, respectively on year-on-year basis. Further, 80 basis points decline in non-performing loans and sharp 900 bps quarter-on-quarter rise in PCR (provision coverage ratio) to 69% were the key positives.

"ICICI Bank continues to show promise with trending lower new NPL formation, and balance sheet growth with higher granularity on both asset and liability side. We expect core bank RoE to improve to 16-17% by FY21E", said Jefferies India in a note.