BSE Sensex rises 0.4 pct; banks, autos climb

People walk past the Bombay Stock Exchange (BSE) building in Mumbai January 9, 2009.

MUMBAI (Reuters) - The BSE Sensex climbed 0.4 percent on Thursday after better-than-expected U.S. factory data lifted Asian equities, but there was resistance as investors were not convinced about the outlook.

Financials firmed on expectations loan demand will pick up in a growing economy, while auto makers rose after 20-30 percent rise in August sales.

Jaiprakash Associates rallied 3.5 percent after it said late on Wednesday August cement dispatches jumped 51 percent.

By 10:46 a.m. (0516 GMT), the 30-share BSE index was trading up 0.44 percent at 18,286.80, with 23 of its components gaining. It rose as much as 0.8 percent early.

"We have been rising due to firm global markets, but there is not enough confidence to sustain the rally," said Ambareesh Baliga, vice-president of Karvy Stock Broking.

He said investors were cautious and were booking profits.

The benchmark index is up 4.7 percent this year, largely driven by foreign portfolio investments of $12.9 billion.

"Valuations are not cheap. It is more of a traders' market," Baliga said.

Top lender SBI rose 0.3 percent while rivals ICICI Bank and HDFC Bank climbed 0.9 percent and 1.4 percent respectively. Mortgage lender Housing Development Finance Corp(HDFC.BO) added 0.8 percent.

Tata Motors rose 1.9 percent, while Maruti Suzuki and Mahindra & Mahindra firmed 1.2 percent and 0.4 percent respectively on robust sales.

Also, Tata Motors chairman said late on Wednesday the company plans to invest $641 million every year for the next three years.

Top motorcycle maker Hero Honda dropped 1.3 percent as its August two-wheeler sales rose by only 2 percent.

In the broader market, gainers outnumbered losers in a ratio of 2.6:1 on volume of 125 million shares.

The 50-share NSE index was up 0.3 percent at 5,490.35.

STOCKS ON THE MOVE

* Bajaj Auto was up 1.7 percent at 2,797.05 rupees, as the second-largest motorcycle maker said its August auto sales rose by 55 percent.

* Reliance Broadcast Network rose 5 percent to 116 rupees after its board approved raising over 4 billion rupees through an issue of equity shares to its founder and other investors.

* Koutons Retail India Ltd was up 1.4 percent at 310 rupees after it said its board would meet on Sept. 4 to consider raising funds through issue of shares to the public or to qualified institutional buyers.

MAIN TOP 3 BY VOLUME

* Piramal Healthcare on 12.2 million shares

* Karuturi Global (KART.BO) on 3.7 million shares

* Shree Ashtavinayak on 2.3 million shares

(Reporting by Ami Shah; Editing by Ranjit Gangadharan)

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