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Metals power Indian shares to best close in 22 mths

 * Up 0.7 pct; extend gains for 3rd session in a row
 * Metals shine on firm price trend, hopes of robust output
 * Bharti gains as Bangladesh approves Warid stake buy
 (Updates to close)
 MUMBAI, Jan 5 (Reuters) - Indian shares climbed 0.7 percent
on Tuesday to their highest close in 22 months, propelled by
metals in anticipation of robust December output data and
stronger prices as a recovering economy boosts demand.
 Sentiment was also helped after a top economic adviser said
there was no need to raise interest rates for now, and the
central bank could drain excess cash to moderate inflation
expectations. [ID:nSGE60404T]
 Leading aluminium maker Hindalco Industries HALC.BO added
7.4 percent to 175.20 rupees. Rival state-run National
Aluminium Co Ltd NALU.BO jumped 14.8 percent to 505.20
rupees.
 "The outlook for metals stocks is good. Base metal prices
are showing a firm trend. December quarter results are likely
to be better due to the base effect," said Pawan Burde,
vice-president of research at PINC Research.
 "Also, JSW Steel production numbers have raised hopes that
others may follow suit," he said.
 JSW Steel Ltd JSTL.BO, India's No. 3 producer of the
alloy, said its crude steel output jumped 88 percent to 1.47
million tonnes in the three months to December. [ID:nBMB009344]
 Some small steel makers also raised prices, boosting
sentiment. [ID:nSGE6040BI]
 Non-ferrous metals producer Sterlite Industries STRL.BO
rose 4.6 percent while Tata Steel TISC.BO, the world's
eighth-largest steel maker by output, climbed 2.4 percent.
 The 30-share BSE index .BSESN rose for the third straight
session and closed up 0.73 percent, or 127.51 points, at
17,686.34, its best close since Feb. 28, 2008.
 Twenty-three of its components advanced.
 "The mood is positive on the back of positive data like
auto sales numbers for December and PMI data. Also, firm base
metal prices are helping," said K. K. Mital, head of portfolio
management services at Globe Capital.
 "Right now, there is nothing so negative that can hurt the
market," he added.
 Foreign funds pumped $17.5 billion into Indian equities in
2009, powering the main index up 81 percent, its best yearly
gain since 1991.
 ICICI Bank ICBK.BO rose nearly 1 percent and mortgage
lender Housing Development Finance Corp HDFC.BO gained 0.3
percent after C. Rangarajan, the prime minister's economic
adviser, said an adjustment in policy interest rates was not
warranted for now.
 Engineering and construction firm Jaiprakash Associates
JAIA.BO, which also has interests in power, rose 5.8 percent
to 162.70 rupees as its December cement shipments leapt 60
percent to 1.06 million tonnes. [ID:nBMA006685]
 "Jaiprakash is benefitting from good delivery at its cement
business. Capacity expansion along with signs of firm demand
trend is helping," said Daljeet Kohli, head of research for
private client group at Emkay Global.
 Bharti Airtel BRTI.BO gained 1.6 percent to 330.10 rupees
after Bangladesh's telecoms authority approved its initial
investment of $300 million in Bangladesh mobile company Warid
Telecom. [ID:nSGE60407P]
 Energy major Reliance Industries RELI.BO extended its
decline, losing 0.5 percent to 1,069.55 rupees.
 The stock had shed 1.3 percent on Monday as the firm sold
some shares raising $577 million to aid its buy of bankrupt
petrochemicals firm LyondellBasell (LBI). [ID:nSGE60304C]
 "While we do not see much in terms of cost synergies for
RIL from the deal, we believe it would likely give RIL access
to LBI's leading distribution network in Europe/U.S. and
presence in the Middle East through LBI's upcoming low-cost
capacity," Goldman Sachs said in a note.
 In the broader market, gainers led losers in a ratio of
1.6:1 on heavy volume of 704 million shares.
 The 50-share NSE index .NSEI rose 0.9 percent to
5,277.90.
 STOCKS THAT MOVED
 * Top vehicle maker Tata Motors TAMO.BO shed 2 percent to
810.95 rupees as investors took profits after it had quintupled
in 2009.
 * Dr Reddy's Laboratories REDY.BO climbed 2.9 percent to
1,177.25 rupees after the drug maker said phase III clinical
trial for its anti-diabetic molecule balaglitazone, being
conducted by Danish firm Rheoscience, had achieved the set
parameters. [ID:nSGE6030GL]
 * Realty firm Godrej Properties GODR.BO gained 9.1
percent on debut to 534.55 rupees. [ID:nSGE60403A]
 MAIN TOP 3 BY VOLUME
 * JSW Energy JSWE.BO on 32.3 million shares
 * Mahindra Satyam SATY.BO on 21.9 million shares
 * NHPC NHPC.BO on 16.7 million shares
 FACTORS TO WATCH
 * For technical analysis double click on www.reutersindia.net
 * Indian rupee report                                  [INR/]
 * Indian bond report                                    [IN/]
 * Dollar slips broadly, some risk assets in demand     [FRX/]
 * Oil nears $82 on 9th day of gains; cold snap boosts   [O/R]
 * Hopes for economy drive risk appetite           [MKTS/GLOB]
 * Wall Street futures point to weaker start              [.N]
 * For closing rates of Indian ADRs                    INADR
 (Editing by Ranjit Gangadharan)













































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