Indian shares rise 0.5 pct, led by Reliance

* Higher European mkts lift sentiment after initial
weakness

* Infosys up as CEO says pursuing deals worth $1 bln

* ONGC, ICICI among major gainers
(Updates with closing prices, analyst comments, details,
European markets performance)

By Pratish Narayanan

MUMBAI, Aug 5 (Reuters) - Indian shares rose 0.5 percent on
Wednesday, climbing back from an initial fall as higher
European markets lifted sentiment after investor caution across
Asia had weighed on the market.

"We are just following overseas markets. I don't see any
major domestic factors moving the market today," Neeraj Dewan,
director at Quantum Securities, said.

Energy giant Reliance Industries (RELI.BO), which has the
most weight in the main index, gained 1.7 percent to 2,075.25
rupees after the sector regulator said on Tuesday the firm can
raise gas supply to its peak rate faster than planned.
[ID:nL4621585]

The company's stock had slumped 18 percent through Tuesday
from a 2009 high on May 19, compared with an 11 percent rise in
the main index during the period.

"Reliance is the company that is holding up the market
today," said T.S. Harihar, vice president of ICICI Securities.

"People are realizing that Reliance is in a good position
now."

Outsourcer Infosys Technologies (INFY.BO) rose 2.5 percent
to 2,094.55 rupees as its chief executive said it was pursuing
12-15 deals worth about $1 billion.

Other major gainers included state-run explorer Oil and Gas
Natural Corp (ONGC.BO), which climbed 4.5 percent to 1,192.40
rupees, and private-sector lender ICICI Bank (ICBK.BO) that
advanced 1.3 percent to 773.35 rupees.

The 30-share BSE index .BSESN ended up 0.46 percent, or
72.85 points, at 15,903.83, with 13 stocks advancing, after
falling as much as 0.9 percent during trade.

The benchmark fell 0.6 percent on Tuesday as weak overseas
markets encouraged investors to lock in profits after the
market had jumped 17.5 percent over the previous three weeks.

The rally had been driven by strong domestic and global
corporate earnings. But worries that stocks are pricey have
emerged as the main index has leapt almost 98 percent from a
2009 low in March and 65 percent this year.

This year, only China's and Indonesia's benchmarks have
outperformed the BSE index, which trades at 17.8 times one-year
forward earnings.

In contrast, benchmarks in other emerging markets such as
Brazil, Indonesia and South Korea trade at a multiple of about
13-14, while Russia trades at 7.8 times.

But analysts say rich valuations may be ignored at least
for the short-term as there is a lot of excess liquidity around
the world waiting to be poured into equity markets.

"When the market seems to be going down, the liquidity in
the system is driving it back up again," Quantum's Dewan said.

In the broader market, gainers led losers 1,619 to 1,078 on
above-average volume of 468 million shares.

The 50-share NSE index .NSEI rose 0.3 percent to
4,694.15.

Asian shares were lower on Wednesday, with Japan's Nikkei
.N225 falling 1.1 percent, while MSCI's measure of other
Asian markets .MSCIAPJ was down 1.1 percent.

At 1025 GMT, the FTSEurofirst 300 .FTEU3 index of top
European shares was up 0.5 percent.

MAIN TOP 3 BY VOLUME

* Mahindra Satyam (SATY.BO) on 29.7 million shares

* Ispat Industries ISPT.BO on 28.5 million shares

* Firstsource Solutions (FISO.BO) on 22.9 million shares

STOCKS ON THE MOVE

* Reliance Infrastructure (RLIN.BO) rose 2 percent to
1,212.30 rupees after it said on Tuesday its consortium with
Reliance Communications (RLCM.BO) and Canada's SNC-Lavalin
(SNC.TO) won a 110 billion rupees ($2.3 billion) Mumbai rail
project.

* Great Offshore (GOFS.BO) climbed 10.4 percent to 559.10
rupees after ABG Shipyard (ABGS.BO) revised its open offer
price for a controlling stake in the firm to 520 rupees.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee gains in line with shares; weak dlr helps
[INR/]
* Indian bond yields steady; supply watched
[IN/]
* Yen up on profit taking, pound jumps on UK data
[FRX/]
* Oil eases below $71, fuel stocks eyed [O/R]
* Risk appetite wanes; eyes on central banks [MKTS/GLOB]
* Futures point to lower start for Wall Street

[.N] * For closing rates of Indian ADRs

INADR (Editing by Ranjit Gangadharan)