Indian shares rise 3.8 pct on global recovery hopes

* Jump in U.S. consumer morale underpins in Asia

* Financials, oil stocks gain

* Bharti Airtel falls 3rd day as proposed MTN deal weighs
(Updates to close)

By Narayanan Somasundaram

MUMBAI, May 27 (Reuters) - Indian shares rose 3.8 percent
on Wednesday to their highest close in more than a week, in
line with Asian peers after a jump in U.S. consumer morale
reinforced expectations the global economy was starting to
recover.

Sentiment was also bolstered by Finance Minister Pranab
Mukherjee's comments the government needed to push long pending
reforms in the financial sector and in the real economy to
support growth. [ID:nBOM190675]

"One of the first steps I propose to take is to meet
bankers and get them committed to a more benign plan of
action," he said, addressing his first news conference after
the ruling coalition was re-elected for a second term.

Banks such as ICICI Bank (ICBK.BO) and State Bank of India
SBI.Bo jumped on hopes rate cuts and an economic recovery
would boost loan growth and reduce the threat of defaults.

Bharti Airtel (BRTI.BO), which is in merger talks with
South Africa's MTN (MTNJ.J) to create an emerging markets
telecoms giant, fell for the third day as the proposed deal
weighed.

The 30-share BSE index .BSESN ended up 3.83 percent, or
520.41 points, at 14,109.64, with 27 stocks advancing.

The benchmark has gained three-quarters of its value from a
2009 low in early March, riding a global rally and fuelled by
about $5.5 billion of investments from foreign funds.

"We are back on our feet with the positive news flow from
the U.S. High beta stocks such as banks are leading on the back
of economic growth expectations," said Jayesh Shroff a fund
manager at SBI Mutual Fund.

Oil and Natural Gas Corp (ONGC.BO) climbed 9.4 percent to
1,107.85 rupees, its highest close in almost nine months and
Reliance Industries (RELI.BO) rose 2 percent to 2,187.20 rupees
after oil rose to its 2009 high.

Top engineer Larsen & Toubro (LART.BO) firmed 4.5 percent
to 1,311.40 rupees buoyed by the possibility of rising orders
from construction, infrastructure and industrials. The firm is
scheduled to announce annual results on Thursday.

Metal producers Sterlite Industries (STRL.BO) gained 9.5
percent to 591.15 rupees, near nine-month closing high, and
Hindalco Industries Ltd (HALC.BO) firmed 2.1 percent to 81.55
rupees on firmer metal prices.

Government-run State Bank of India, the country's top
lender, rose 6.1 to 1,790.55 rupees, and private-sector ICICI
Bank climbed 6.6 percent to 710.55 rupees.

Shares in leading telecoms firm Bharti Airtel (BRTI.BO),
which had fallen more than 10 percent in the past three days on
concern the proposed MTN deal would dilute its earnings
initially, eased 0.2 percent to 768.90 rupees. [ID:nSP477731]

In the broader market, gainers led losers by more than 5 to
1 on heavy volume of 705.4 million shares.

The 50-share NSE index .NSEI rose 3.9 percent at
4,276.05.

An index of U.S. consumer confidence surged in May,
strongly topping expectations as it registered the biggest
monthly jump since April 2003, according to the Conference
Board, an industry group. [ID:nN26489555]

Asian markets rose to a seven-month peak after the
overnight Wall Street rally. Japan's Nikkei .N225 rose 1.4
percent, while MSCI's measure of other Asian markets .MSCIAPJ
rose 2.4 percent.

MAIN TOP 3 BY VOLUME

* Alok Industries (ALOK.BO) on 24.4 million shares

* Idea Cellular (IDEA.BO) on 19.9 million shares

* Reliance Natural Resources (RENR.BO) on 18.1 million
shares

STOCKS THAT MOVED

* Tata Motors (TAMO.BO) climbed 5.6 percent to 343.55
rupees on reports the leading vehicle maker was close to
refinancing its bridge loan taken to buy Jaguar and Land Rover
brands last year from Ford (F.N).

* Mangalore Refinery and Petrochemicals (MRPL.BO) rose 15.6
percent to 75.95 rupees after its March-quarter net profit
almost trebled from a year earlier.

* Sobha Developers Ltd (SOBH.BO) rose 6.9 percent to 193.15
rupees after the realtor sold stakes in projects in Bangalore
and other cities to Bangalore-based Purna Partners for 2.25
billion rupees.

* Cummins India Ltd (CUMM.BO) gained 3.9 percent to 260.65
rupees after the engine maker reported a 56 percent jump in
March-quarter profit to 1.18 billion rupees, topping market
estimates.

* Sugar firms Bajaj Hindusthan (BJHN.BO), Balrampur Chini
(BACH.BO), Shree Renuka Sugars (SRES.BO) and Uttam Sugar
(UTSM.BO) dropped 1.5-5 percent after the commodity regulator
put curbs on futures trade in sugar to drive prices lower.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee gains mirroring stocks, Asian currencies
[INR/]
* Indian bond yields up on borrowing jitters
[IN/]
* Dollar inches up on ECB remark; cable hits $1.60
[FRX/]
* Oil hits 6-month high over $63; Saudi sees recovery [O/R]
* Stocks up, oil at 2009 high on recovery hopes [MKTS/GLOB]
* US stocks set to open higher; home sales eyed

[.N] * For closing rates of India ADRs

INADR
(Editing by Ranjit Gangadharan)