* BSE rises 1.4 pct; NSE ends 1.5 pct higher
* Current account deficit biggest concern - finmin adviser
* Indian stocks join Asia's 'cheapest 4' club - CSuisse
(Updates with milestone for biggest daily gain in paragraph 5)
By Manoj Dharra
MUMBAI, March 5 Indian shares posted on Tuesday
their biggest daily percentage gains this year on growing hopes
the central bank will cut interest rates later this month, which
boosted rate-sensitive stocks such as ICICI Bank and Tata
The gains were in line with global shares that rebounded
sharply, reclaiming most of the previous day's steep losses, as
investors bet major central banks would decide to keep monetary
policy loose at meetings this week.
However, India's record-high current account deficit remains
a key worry as it is increasing the dependence on foreign
investments, the government's top economic adviser said on
Tuesday, making the country vulnerable to a sudden stop and
reversal in fund inflows.
"Buying from FIIs continued on Tuesday while partially it
was short covering as it was an oversold market, but volatility
levels suggest there is still caution," said Deven Choksey,
managing director, KR Choksey Securities.
The benchmark BSE index rose 1.4 percent, or 265.21
points, to end at 19,143.17, posting their biggest single daily
gains since Nov. 29.
Gains come a day after indices end near the lowest close
since Nov. 27, hit on Thursday.
The broader NSE index rose 1.5 percent, or 85.75
points, to end at 5,784.25.
The central bank's policy will decide the momentum for the
market even as India's finance minister continues to assure on
growth, Choksey added.
Among rate-sensitive shares that gained, ICICI Bank Ltd
rose 3.3 percent and Tata Motors was up 3.7
Credit Suisse said in a report that India has joined "the
Cheapest-4 club" as of Tuesday, meaning it is among the four
most inexpensive markets in the Asia ex-Japan region. The report
highlighted Tata Motors Ltd, Reliance Industries Ltd
, Bank of Baroda and Sterlite Industries
(India) Ltd, citing valuations.
Reliance Industries shares ended 1.7 percent
higher, rising for the second day, after Morgan Stanley upgraded
the stock on expectations of an improvement in core business.
Shares in Dr Reddy's Laboratories rose 1.6 percent
after the pharma company launched its Zoledronic Acid injection
in the United States.
Export-driven stocks, such as technology and pharma
companies, gained tracking weakness in Indian rupee. Tata
Consultancy Services rose 1.8 percent while Cipla
shares ended 2.9 percent higher.
Shares in India's Zee Entertainment Enterprises Ltd
fell 0.45 percent after UBS downgraded the stock to "sell" from
"buy", citing expectations of bigger losses from sports-related
TV channels in fiscal 2013/14 as well as increased losses from
new investments in channels.
J.P. Morgan Securities lowered its rating on India's Bajaj
Auto Ltd to "underweight" from "neutral" and cut its
target price to 1,800 rupees from 2,060 rupees, citing a
weakening outlook for two-wheeler sales growth due to rising
fuel prices and high inflation.
Shares in Bajaj Auto fell 0.79 percent.
(Additional reporting by Abhishek Vishnoi; Editing by Jijo