Indian shares end at 1-week high; bank bill hopes outweigh RBI status quo

* BSE index gains 0.63 pct; NSE ends 0.66 pct higher
* RBI reiterates Oct guidance of further easing in Jan-March
quarter
* Banks gain on banking amendment bill expectations

By Abhishek Vishnoi
MUMBAI, Dec 18 (Reuters) - Indian shares rose on Tuesday led
by lenders such as SBI, as hopes parliament will pass the
banking amendment bill outweighed disappointment after the
Reserve Bank of India kept interest rates and the cash reserve
ratio unchanged.
India's central bank kept rates on hold on Tuesday, ignoring
government pressure to reduce borrowing costs, but said it was
shifting focus towards boosting a flagging economy, raising the
odds of a rate cut as early as January.
Analysts said domestic markets benefitted from improved
demand for global risk on the back of signs of a U.S. budget
compromise intended to resolve the so-called "fiscal cliff."
"Market is getting more hopeful that RBI will lower rates in
the next policy meet," said Hemant Khanwala, Head of Equities,
Kotak Life Insurance.
The banking amendment bill should pass through looking at
the debate in the ongoing parliament session, he added.
The benchmark BSE index rose 0.63 percent, or
120.33 points, to end at 19,364.75, marking its biggest single
day percentage gain since Nov. 30.
The broader NSE index rose 0.66 percent, or 38.90
points, to end at 5,896.80, marking its highest close in a week.
Shares in banks such as State Bank of India ended
1.2 percent higher after falling as much as 2.8 percent. ICICI
Bank rose 0.4 percent, while Bank of India
gained 2.9 percent.
Gains were fuelled by expectations the banking amendment
bill will pass parliament after the government dropped a
controversial clause that would have allowed banks to trade in
commodity futures.
India's parliament is expected to amend banking laws that
include raising the limit on shareholders' voting rights in
public and private sector banks, a step seen as largely positive
towards the government's reform drive.
India's Bharat Heavy Electricals Ltd gained 4.2
percent after CLSA added the stock to its Asia ex-Japan long
only portfolio with a 3 percent weighting.
Tata Consultancy Services rose 0.4 percent after
its management reiterated its positive forecast for fiscal years
2013 and 2014 in a meeting with analysts on Monday.

Shares in Sun Pharmaceutical Industries, India's
most valued drugmaker, gained 2.2 percent after its unit agreed
to buy the generic drugs business of U.S.-based URL Pharma from
Japan's Takeda Pharmaceutical Co
However, among stocks that fell, Jaiprakash Power Ventures
Ltd ended 6.8 percent lower after its promoters sold
49.7 million shares, or about 2 percent of its equity, at an
average price of 39 rupees a share.
Shares in Financial Technologies (India) Ltd fell
0.5 percent and Multi Commodity Exchange of India Ltd (MCX)
ended 0.7 percent lower after the government said it
would drop a controversial clause from a banking bill pending in
parliament that would have allowed banks to trade in commodity
futures.
Traders said if the bill was approved in its original form
it would have led to additional trading volumes in the commodity
market and would have been positive for both companies.

For additional stocks on the move double click

FACTORS TO WATCH
* Yen weak, holds near 20-month lows versus dollar
* Brent rises above $108 on hopes for US fiscal cliff fix
Ÿ
* U.S. budget hopes lift shares, other risk assets
* Foreign institutional investor flows
* For closing rates of Indian ADRs

ASIA-PACIFIC STOCK MARKETS:
Pan-Asia........ Japan....... S.Korea...
S.E. Asia....... Hong Kong... Taiwan....
Australia/NZ.... India....... China.....

OTHER MARKETS:
Wall Street .... Gold ....... Currency..
Eurostocks..... Oil ........ JP bonds...
ADR Report ..... LME metals. US bonds..
Stocks News US.. Stocks News Europe

DIARIES & DATA:
Indian Data Watch Asia earnings diary
U.S. earnings diary European diary
Indian diary Wall Street Week Ahead
Eurostocks Week Ahead

TOP NEWS:
For top Asian company news, double click on:
U.S. company news European company news
Forex news Global Economy news
Technology news Telecoms news
Media news Banking news
Politics/General Asia Macro data <ECONASIA

(Additional reporting by Manoj Dharra; Editing by Sunil Nair)