Indian shares end near 2-week closing high; techs lead

* BSE index gains 0.57 pct; NSE ends 0.56 pct higher
* Non-banking financial shares gain after key bill passed
* Steel companies shine on China coke duty cut

By Abhishek Vishnoi
MUMBAI, Dec 19 (Reuters) - Indian shares rose for a second
consecutive session on Wednesday, marking their highest close in
almost two weeks, led by IT stocks such as Infosys after recent
losses were seen as overdone and on hopes a resolution to the
"U.S. cliff" standoff would improve the outlook for the sector.
Shares in non-banking financial companies such as Shriram
Transport Finance also rose after a bill laying the
groundwork for the issuance of new bank licenses was approved by
parliament.
Analysts said with government reform-driven gains likely to
subside as the winter session of parliament ends on Thursday,
global risk factors may become more important for domestic
markets.
Global shares hit 17-month highs and the euro surged
on Wednesday on hopes that U.S. politicians will reach a budget
deal and that Japan would implement further monetary stimulus.
"Markets would now pick an excuse from what is happening
globally like the U.S. fiscal cliff issue, otherwise there is
scope of correction," said Paras Adenwala, managing director at
Capital Portfolio Advisors.
The benchmark BSE index rose 0.57 percent, or
111.25 points, to end at 19,476, marking its highest close in
almost two weeks.
The broader NSE index rose 0.56 percent, or 32.80
points, to end at 5,929.60, closing above the psychologically
important 5,900 level.
Shares in Tata Consultancy Services gained 1.8
percent as a U.S. budget deal would improve the outlook for a
key market for software services exporters.
TCS shares also rose after Morgan Stanley upgraded the stock
to 'overweight' from 'equal-weight', noting IT spending could be
stable in fiscal year 2013 and revenues would improve in fiscal
2014.
Technology shares also rose after recent losses were seen as
overdone. Infosys ended 1.1 percent higher after
falling 6.8 percent in December, as of Tuesday's close
Non-banking financial companies rose on hopes diversifying
into banking would improve their earnings potential. Shriram
Transport Finance gained 0.8 percent, after earlier hitting its
highest level since May 25, 2011.
Smaller private-sector banks also rose, with Federal Bank
ending up 6.1 percent at an all-time closing high of
527.80 rupees, on hopes the banking amendment bill will spark
consolidation in the sector.
Traders said NBFCs could look to purchase smaller lenders to
expand their footprint in the sector after getting banking
licenses.
Among other smaller private banks, Dhanlaxmi Bank
gained 3 percent, while Karnataka Bank ended 5.3
percent up.
Steel companies gained after China said it will scrap a 40
percent export duty on metallurgical coke, a steel-making raw
material, from next year.
The move is expected to weigh on prices of metallurgical
coke, giving steel firms access to cheaper imports from China.
Tata Steel gained 2.4 percent while Jindal Steel
and Power ended 2.5 percent higher.
However, among stocks that fell, banks such as Oriental Bank
of Commerce lost 2.5 percent, while Dena Bank
ended down 1.6 percent on profit booking.
ICICI Bank fell 0.9 percent after earlier hitting
its highest level since December 2010, while Axis Bank
ended 1.4 percent down as recent outperformance was seen
overdone.
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FACTORS TO WATCH
* Euro hits 16-mth high vs yen, 7-1/2 month high vs dollar
* Oil rises above $109 on hopes of US budget solution
* U.S. budget optimism send shares, euro up
* Foreign institutional investor flows
* For closing rates of Indian ADRs

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