India shares up more than 2 pct; banks, techs lead

(Updates to mid-morning)

MUMBAI, Dec 24 (Reuters) - Indian shares rose more than 2 percent in morning trade on Monday, led by banks and technology stocks as fears of a U.S. recession eased, and fading concerns of early national elections and higher Asian markets also helped.

The comfortable re-election of Hindu nationalists in the Gujarat state election lowered the chances that ruling Congress party could call an early national election, analysts said.

At 11:12 a.m. (0542 GMT), the 30-share BSE index .BSESN was up 2.66 percent, or 510.54 points, at 19,673.11, with all its components rising, after opening 0.76 percent up.

Second-largest lender ICICI bank (ICBK.BO) gained 4 percent to 1,203.70 rupees, while mortgage-lender Housing Development Finance Corp (HDFC.BO) added 4.4 percent to 2,845 rupees.

The index is 4 percent below its record high of 20,498.11 hit on Dec. 13.

"Now the chance of mid-term poll is very low. So people who were bearish over the weekend had to rethink their strategy," said Gajendra Nagpal, director at Unicon Financial in New Delhi.

"Gujarat election results will have a bearing on other state elections, and (there is) no way the Congress would go for elections," he said.

Equity markets elsewhere in Asia were trading higher on Monday, with technology and financial stocks leading, after stronger-than-expected U.S. consumer spending calmed fears the world's top economy was heading into a recession.

"The way other markets are behaving today, I see no reason why our market should turn down," Nagpal said.

But JM Financial said in a note that investors should use the rally as a selling opportunity, as the next leg of a downtrend could begin later this week.

Gains in export-driven software services companies, which had been beaten down by a sharp rise in rupee, were helped by stronger results from technology companies in the United States.

Bellwether Infosys Technologies (INFY.BO) gained 4.7 percent to 1,778.30 rupees, while the BSE IT sector index .BSEIT was up 4.1 percent.

In the broader market, 1,968 of the gainers led 684 losers on volume of 165 million shares.

The 50-issue NSE index was up 2.48 percent at 5,909.60.

Elsewhere in the region, Karachi's 100-share index was up 0.74 percent at 14,768.41, while Colombo's All-share index .CSE had gained 0.29 percent to 2,517.29.

STOCKS ON THE MOVE

* No. 3 software exporter Wipro Ltd (WIPR.BO) gained 6.2 percent to 522.40 rupees. The Hindustan Times, citing unnamed sources, reported that Wipro was expected to bid for Capgemini (CAPP.PA) by the end of January in a deal valuing the French firm at up to $7 billion.

* Tide Water Oil Co. (India) Ltd (TIDE.BO) gained 4.9 percent to 4,320 rupees after the Times of India reported on Saturday the Hinduja group may bid for the lubricants maker, in which oil major Chevron (CVX.N) indirectly owns a 22 percent stake.

* Bajaj Hindusthan Sugar & Industries Ltd (BAHS.BO) added 4.9 percent to 47.80 rupees after Bajaj Hindusthan Ltd (BJHN.BO) said on Thursday it would make an open offer for an additional 20 percent in the company at 50 rupees a share.

MAIN TOP THREE BY VOLUME

* IFCI Ltd (IFCI.BO) on 13.7 million shares

* Himachal Futuristic Communications (HMFC.BO) on 5.3 million shares

* Ispat Industries (ISPT.BO) on nearly 5 million shares

FACTORS TO WATCH * Indian rupee gains on Asian currencies, stocks [INR/] * Indian bonds steady as traders eye cash supplies [IN/] * FOREX-Dollar near 6-week high vs yen in thin trade [FRX/] * Oil little changed above $93, trade muted by holidays [O/R] * GLOBAL MARKETS-Stocks rise on US slowdown relief; dollar firm [MKTS/GLOB] * Wall St Wk Ahead:Home sales, rates may extend Santa rally [.N] * For closing rates of Indian ADRs INADR (Reporting by Devidutta Tripathy; Editing by John Mair)