* Shares rally after 2-day holiday, catch up with Wall St
* Factory output falls, but some analysts see silver lining
* Reliance, ICICI lead rise; Bharti drops after CEO sells
stake
* Tata Motors gains on UK grant for Jaguar, Land Rover unit
(Updates to close)
By Pratish Narayanan
MUMBAI, March 12 (Reuters) - Indian shares rose 2.25
percent on Thursday, led by energy giant Reliance Industries
(RELI.BO) and private lender ICICI Bank (ICBK.BO), as investors
caught up with gains on Wall Street after a two-day local
holiday.
Factory output fell for the third time in four months in
January, but some traders saw a silver lining in the data and
said the worst was perhaps behind us.
"I think January was clearly a better month than the past
three months. The supply side problem, including the supply of
credit, has abated considerably in January," Abheek Barua,
chief economist at HDFC Bank, said.
Shares in Bharti Airtel (BRTI.BO) bucked the trend and fell
6.4 percent after the top telecom firm's chief executive sold
his holding in the company. He later said he still held 180,000
options and would continue in his position. [ID:nDEL293967]
The 30-share BSE index .BSESN closed up 183.35 points at
8,343.75, with 25 stocks advancing.
Bharti, which has the fourth heaviest weight in the index,
dropped to 550.30 rupees, its lowest close since last Oct. 24,
after falling as much as 7.4 percent at one stage.
Top vehicle maker Tata Motors (TAMO.BO) raced 6.8 percent
to 145.95 rupees after the British government announced a 27
million pound ($37 million) grant to its Jaguar Land Rover
unit. [ID:nLB938133]
Fraud-hit Satyam Computer Services (SATY.BO) ended down 3.2
percent at 47.20 rupees, as the company closes registrations
for potential bidders on Thursday, kicking off a process to
sell a majority stake in the firm. [ID:nBOM443496]
Factory output fell 0.5 percent in January while the
December number was upwardly revised to show a contraction of
0.6 percent rather than the original 2 percent fall, government
data showed on Thursday. [ID:nDEL411086]
The upward revision of December factory data together with
likely changes to the agricultural output numbers, will
probably lead to an upward adjustment to the 5.3 percent
October-December gross domestic product (GDP) growth figure,
HSBC said.
"With commodity prices having collapsed, fiscal policies
eased and policy interest rates cut, domestic activity should
remain resilient," HSBC economist Robert Prior-Wandesforde
said.
The central bank could cut policy rates by 50 basis points
ahead of the general elections starting in mid-April, he said.
Shares in Reliance Industries, India's largest-listed firm
with the biggest weighting in the main index, rose 4.2 percent
to 1,201.95 rupees, while ICICI jumped 8 percent to 284.25
rupees.
Confidence was also bolstered by a two-day rally in U.S.
stocks, following comments by top executives at JPMorgan
(JPM.N) and Citigroup (C.N) that the U.S. banks were making
profits. [ID:nN11316794]
"Right now, India is taking its cue from the global
markets... We are doing a bit of catching up after the
holidays," Sandeep Neema, fund manager at JM Financial Mutual
Fund, said.
The 50-share NSE index rose 1.7 percent to
2,617.45.
Still, a drop in Asian stocks after grim Chinese export
data signalled the global economy was not out of the woods
could make the rise in Indian shares shortlived. [ID:nSP441272]
Foreign funds, who have pulled more than $2.3 billion from
the market this year, remain jittery, traders said.
In the broader market, losers slightly led advancers 1,270
to 1,161 on relatively light volume of 234.8 million shares.
MAIN TOP 3 BY VOLUME
* Satyam Computer on 37.6 million shares
* IDFC (IDFC.BO) on 16.1 million shares
* Rolta India Ltd (ROLT.BO) on 9.9 million shares
STOCKS THAT MOVED
* Tata Consultancy Services (TCS.BO) gained 2.8 percent to
475.30 rupees after the top outsourcer said on Tuesday that it
won a multi-year IT solutions contract from German
semiconductor maker Infineon Technologies AG (IFXGn.DE).
* Logistics firm Gati Ltd (GATI.BO) rose 4.1 percent to
39.50 rupees after it said it planned to acquire the remaining
26.28 percent stake in trucking company, Kausar India, through
an open offer.
* Gateway Distriparks Ltd (GATE.BO) rose more than 2.6
percent to 44.15 rupees after Allcargo Global Logistics Ltd
(ALGL.BO) said it had acquired about 6.1 million shares or 5.97
percent stake in the rival.
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee pares gains as importers buy dollars
[INR/]
* Indian bond yields at 3-½ mth peak on supply woes
[IN/]
* Yen rallies, up 1.3 pct vs dlr; SNB eyed
[FRX/]
* Oil rebounds towards $43; China data offers hope [O/R]
* Economic gloom spreads, hitting stocks [MKTS/GLOB]
* US stock futures point to drop; retail sales eyed
[.N] * For closing rates of Indian ADRs
INADR (Editing by Ranjit Gangadharan)
