Indian shares touch two-year highs; ITC, telecom carriers surge

* BSE index gains 0.4 pct; NSE ends up 0.5 pct
* SpiceJet shares surge on stake-sale report
* RBI action on rates, Q3 earnings key

By Abhishek Vishnoi
MUMBAI, Jan 15 (Reuters) - Indian shares rose for a second
successive session on Tuesday to touch two-year highs as ITC
advanced ahead of its earnings on Friday, while wireless
carriers jumped on speculation about tariff hikes.
Shares continue to be supported after the government on
Monday delayed the implementation of controversial rules on tax
avoidance and lower-than-expected inflation numbers bolstered
the case for a cut in interest rates.
However, until the central bank policy review on Jan. 29,
analysts expect earnings to remain the key drivers for Indian
shares, as investors look for signs that profits will improve
this year on the back of a recovery in economic growth.
"Market would remain strong on the back of continued
liquidity and Q3 earnings would mark the bottoming of earnings
growth for India Inc," said Rajen Shah, chief investment
officer, Angel Broking
In financial year 2013-14, Sensex EPS should grow by 13-14
percent, added Shah.
The BSE index ended up 0.4 percent, or 80.41
points, at 19,986.82, its highest close since Jan. 6, 2011. It
had earlier breached the psychologically important 20,000 level.
The broader NSE index rose 0.54 percent, or 32.55
points, to end at 6,056.60, closing above 6,000 for the second
day.
Cigarette maker ITC rose 2.2 percent, after already
gaining 1.7 percent on Monday as investors bet October-December
earnings due would show continued growth.
ITC has posted double-digit net profit growth in the
previous two quarters of the fiscal year that started in April
2012.
Shares in Axis Bank gained 2.8 percent after the
private bank reported a better-than-expected 22 percent rise in
net profit in the December quarter, while non-performing assets
fell to 0.33 percent versus 0.39 percent year ago.

Tata Consultancy Services Ltd, India's largest
software services exporter, ended up 0.2 percent after gaining
as much as 4.9 percent at one point, a day after posting
better-than-expected earnings.
Among telecoms operators, Bharti Airtel Ltd shares
rose 5 percent to their highest since March 2012, while Idea
Cellular Ltd surged 8.4 percent to its highest close
since February 2008 on speculation the mobile carriers may soon
raise voice call tariffs, several traders said.
Both companies declined to comment on the market rumours.
India's mobile phone market -- the world's second-biggest by
customers -- has not seen any meaningful increase in call prices
in the last three years after a vicious price war sent call
charges tumbling.
Shares in India's SpiceJet Ltd gained 4.09 percent
after the Times of India newspaper reported the budget carrier
was close to selling a stake to a foreign carrier, citing
unidentified sources.
Maruti Suzuki Ltd, India's largest car maker,
gained 0.45 percent, after the company said it will raise
vehicle prices by up to 20,000 rupees ($370).
Among stocks that fell, IT outsourcer Infosys ended 0.7
percent lower, hit by profit-taking after surging 20.85 percent
in the previous two sessions on the back of better-than-expected
earnings on Friday.
Jaiprakash Power Ventures Ltd shares dropped 5
percent, falling for a second day on fears of equity dilution
after its board approved raising up to 35 billion rupees and
also reported a loss of 976 million rupees for the December
quarter.

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FACTORS TO WATCH
* Yen rebounds on Japan Amari's remarks, dollar struggles
* Brent slips to $111.50 as US debt talk uncertainty weighs
* Shares stall on U.S. debt ceiling fears
* Foreign institutional investor flows
* For closing rates of Indian ADRs

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(Additional reporting by Manoj Dharra; Editing by Prateek
Chatterjee)