Indian shares rise for 5th day to 2-wk closing high

* Fifth successive rise has market 38 pct above 2008 low.

* Banks lead gains on hopes of lending rate cuts

* Stronger rupee hits software exporter stocks (Updates to close)

By Devidutta Tripathy

MUMBAI, Nov 4 (Reuters) - Indian shares rose 2.84 percent on Tuesday, a fifth straight gain that took them to their highest close in two weeks, on hopes that cuts in bank lending rates would help credit flow more freely and ease a cash squeeze.

The top two banks, State Bank of India (SBI.BO) and ICICI Bank (ICBK.BO), rose 6.5 percent each, with ICICI posting its strongest close in a month.

Hopes that the market's 38 percent surge from a three-year low hit last week would lead to some foreign inflows helped the rupee strengthen to a three-week high past 48.00 per dollar, which weighed on software exporters that get half of their revenue from the United States.

Infosys Technologies (INFY.BO) fell 3.3 percent, and Tata Consultancy (TCS.BO) and Satyam Computer Services (SATY.BO) lost both lost 7.4 percent.

Finance Minister Palaniappan Chidambaram said the central bank would keep a close watch on cash conditions and banks will provide credit to key sectors, and the chairman of State Bank said his bank would cut lending rates by 25 or 50 basis points.

"Easy money is going to be made available again," said Gajendra Nagpal, CEO at Unicon Financial in New Delhi.

"If interest rates head lower, that would have a positive impact on corporate profitability."

"Feels like there is some serious kind of bargain hunting going on. May be money from domestic mutual funds and insurance companies, which was waiting on the sidelines, is coming to the market."

The 30-share benchmark index .BSESN rose 293.44 points to 10,631.12, its highest close since Oct 21, with 24 stocks rising, having been down more than 2 percent in morning trade.

While the index has rallied sharply from a three-year low of 7,697.39 hit on Oct. 27, it is still down 47.6 percent in 2008.

In the broader market gainers led losers 1,812 to 785 on relatively high volume of 387 million shares.

"Seems like the RBI move had its desired impact, but difficult to say how long it will continue. Thirty eight percent in just over a week, nobody really anticipated," Nagpal said.