Indian shares up as world mkts rally; metals shine

* Global equities rise on strong U.S. manufacturing data

* Sterlite, Hindalco jump on rise in base metals prices

* Tata Motors gains on robust January sales data

(Updates to morning)

MUMBAI, Feb 2 (Reuters) - Indian shares were trading
higher on Tuesday, with metals leading the rally, after strong
U.S. manufacturing data bolstered hopes the global economic
recovery was on a firm footing, pushing world stocks higher.

However, they came off early highs as Asian shares erased
some of their early gains.

Metals makers Sterlite Industries (STRL.BO) and Hindalco
(HALC.BO) rose a respective 3.1 percent and 3.3 percent, as
base metal prices firmed on robust U.S. manufacturing data.

The U.S. manufacturing sector grew in January at a faster
rate than expected, with the index reading at its highest since
August 2004. [ID:nN01363414]

By 10:41 a.m. (0511 GMT), the 30-share BSE Index .BSESN
was trading up 0.25 percent at 16,396.22, with half of its
components gaining.

"The investor sentiment is driven by positive newsflow. The
strong data from the U.S. is pushing our market up," said
Daljeet Kohli, head of research for private client group at
Emkay Global. "After the recent decline, a bounce back was
waiting to happen, and the data from U.S. triggered it," he
added.

The benchmark which had gained 81 percent in 2009, is down
more than 6 percent so far in 2010.

Export-focussed software companies gained after strong U.S.
data raised expectations of improved order flow from one of
their biggest markets.

Infosys Technologies (INFY.BO) rose 1 percent, while Tata
Consultancy (TCS.BO) and Wipro (WIPR.BO) climbed 1.6 percent
and 0.7 percent respectively.

Automobile shares rose as the market cheered their robust
January sales numbers.

"Despite possible hiccups in the form of higher interest
rates/excise duties, we expect demand to remain strong in
FY11," Edelweiss Securities said in a note on Monday.

India's top vehicles maker Tata Motors (TAMO.BO) rose 1.3
percent after it said its January sales jumped 77 percent.
[ID:nBMA006916]

Mahindra and Mahindra (MAHM.BO) and Maruti Suzuki (MRTI.BO)
were both up 0.2 percent.

The country's top power producer NTPC (NTPC.BO) bucked the
trend and declined 1.6 percent to 207.95 rupees.

NTPC has set a floor price of 201 rupees a share for its
follow-on public offer, indicating the sale will raise at least
82.87 billion rupees ($1.8 billion), an advertisement in the
Economic Times newspaper showed. [ID:nSGE61102D]

In the broader market, gainers were nearly three times the
number of losers in a volume of 132 million shares.

The 50-share NSE index .NSEI was up 0.1 percent at
4,903.15.

STOCKS ON THE MOVE

* Cement maker ACC (ACC.BO) was up 1.3 percent at 884.90
rupees after it said on Monday shipments in January rose 1.1
percent to 1.91 million tonnes. [ID:nBMA006917]

* Ambuja Cements (ABUJ.BO) rose 0.8 percent to 102.05
rupees, after it reported January shipments rose to 1.75
million tonnes, up 7.5 percent from a year earlier.
[ID:nBMA006914]

* Oil explorer Cairn India (CAIL.BO) was up 0.3 percent at
265.60 rupees, as oil prices topped $75 per barrel.

MAIN TOP 3 BY VOLUME

* Himachal Futuristic (HMFC.BO) on 8.6 million shares

* IFCI (IFCI.BO) on 6.9 million shares

* Reliance Media World RELW.BO on 2.8 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report [INR/]
* Indian bond report [IN/]
* Euro falls, dollar and yen gain after RBA decision [FRX/]
* Oil tops $75 on optimism about U.S. recovery [O/R]
* Asia shares rebound; resource stocks surge [MKTS/GLOB]
* Wall St rallies on ISM manufacturing data, Exxon [.N]
* For closing rates of Indian ADRs INADR
(Reporting by Ami Shah; Editing by Malini Menon)