Indian shares rise to near 1-month closing high

* Improving economy powers banks, investors upbeat

* Foreign fund buying nears $15 bln in 2009

* Reliance Industries, State Bank, ICICI Bank lead rise

* Sterlite gains as court ruling favours rival's Asarco bid

* Software firms drag as rupee climbs to near month high
(Updates to close)

By Ami Shah

MUMBAI, Nov 16 (Reuters) - Indian shares climbed more than
a percent on Monday to their highest close in nearly a month,
with energy giant Reliance Industries (RELI.BO) and banks such
as State Bank of India (SBI.BO) and ICICI Bank (ICBK.BO)
powering the rise on optimism about the economy.

Asia's third-largest economy could expand between 6 and 7
percent in the year to March 2010 despite a bad monsoon, the
finance minister said on Saturday. [ID:nLE159959]

"The effort now is to bring the economy back on the growth
path of 9 percent per annum," Pranab Mukherjee said without
giving a time frame.

Traders said banks would be a beneficiary as demand picks
up and companies begin to invest in expansion projects. An
improving economy would also lower the risk of consumer
defaults, they said.

"We are positive on SBI and ICICI Bank as their long-term
growth story is intact," said Jigar Shah, vice-president of
equity sales at Motilal Oswal.

State Bank, the country's largest lender, rose 2 percent to
2,344.65 rupees while rival ICICI gained 1 percent to 918.85
rupees.

Reliance Industries, which has the highest weight in the
main index, rose 1.5 percent to 2,147.75 rupees, ahead of its
annual general meeting on Tuesday.

The 30-share BSE Index .BSESN rose 1.09 percent, or
183.68 points, to 17,032.51 points, its best close since Oct.
20. Twenty-six of its components ended in the green.

"Positive global cues and asset allocation are helping our
market," Shah said. "When there is a view built up that the
future is better, people do not mind buying at higher
valuations."

The benchmark rose above 17,000 for the first time since
Oct. 23 and is up more than 7 percent this month, after
shedding 7.2 percent in October in its worst monthly
performance in a year.

Foreign funds have been a driver for the market, ploughing
in nearly $15 billion so far in 2009. The inflow has lifted the
index more than three-quarters in the period.

Metals producer Sterlite Industries (STRL.BO) added 3.6
percent to 867 rupees after a U.S. federal judge issued a
ruling supporting a bid by rival Grupo Mexico (GMEXICOB.MX) for
Asarco LLC. [ID:nN14494858]

Morgan Stanley said the decision may remove confusion
related to Asarco and bring focus back to Sterlite's more
lucrative initiatives, especially in India.

The development also frees up cash that can be utilized for
its new projects, it said in a note.

"We believe investors would also appreciate in the medium
term, that Sterlite should be better off not having Asarco
assets than having bought the same at a price higher than $2.2
billion (Sterlite's penultimate bid)," Morgan Stanley said.

Top vehicle maker Tata Motors (TAMO.BO) climbed 2.3 percent
to 633.90 rupees after the Financial Times said Jaguar Land
Rover was expected to announce it secured a 170 million pound
working capital facility from GE Capital [GECAIC.UL].
[ID:nLG120998]

Leading carmaker Maruti Suzuki (MRTI.BO) firmed 5.5 percent
to 1,560.40 rupees on robust volume outlook.

"With macro environment improving, there are catalysts in
form of improving product mix, lower raw material cost and
higher operating leverage which would drive profitability and
earnings growth for the company," Motilal Oswal said in a note.

Export-focused software firms dropped as the rupee firmed
to its strongest against the dollar in nearly a month.

Top software services company Tata Consultancy (TCS.BO)
shed 1 percent and rival Infosys Technologies (INFY.BO) lost
0.3 percent. Wipro (WIPR.BO) bucked the trend and closed 0.6
percent higher.

In the broader market, gainers outnumbered losers in a
ratio of 1.8:1 on relatively lower volume of 342 million
shares.

The 50-share NSE index closed 1.2 percent higher at
5,058.05.

STOCKS THAT MOVED

* UltraTech Cement (ULTC.BO) ended up 1.5 percent at 740.30
rupees after swinging widely in early deals. Its board approved
issuing four shares for every seven held in group firm
Samruddhi Cement, which it will absorb to form India's largest
cement firm. [ID:nSP337897]

* Drug maker Glenmark Pharmaceuticals (GLEN.BO) rose 3.5
percent to 230.05 rupees. It said its Glenmark Generics has
settled all pending litigation with Medicis Pharmaceutical Corp
(MRX.N) relating to patent actions regarding Fluocinonide.
[ID:nBOM272584]

* Wind turbine maker Suzlon Energy (SUZL.BO) rose 8.1
percent to 72.10 rupees. Its North American unit won an order
to supply wind turbines with a capacity to produce 21 megawatts
of electricity. [ID:nBMA006427]

MAIN TOP 3 BY VOLUME

* Suzlon Energy on 21.8 million shares

* Mahindra Satyam (SATY.BO) in 8.4 million shares

* Spicejet (SPJT.BO) on 7.8 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report [INR/]
* India bond report [IN/]
* Dollar slips after APEC, risk demand rises [FRX/]
* Oil advances 1.4 pct to above $77 on dlr weakness [O/R]
* Stocks, commodities march higher; dollar down [MKTS/GLOB]
* U.S. stock futures signal gains; retail sales eyed [.N]
* For closing rates of Indian ADRs INADR
(Editing by Ranjit Gangadharan)