Indian shares rise 1 pct; banks, Sterlite up

* Banks lead as long-term outlook seen positive

* Sterlite gains as ruling favours rival's bid for Asarco

* Tata Motors gains on report of Jaguar-Land Rover loan

* Software firms lag as a firm rupee hurts
(Updates to morning)

MUMBAI, Nov 16 (Reuters) - Indian shares rose more than 1
percent on Monday morning to their highest in more than three
weeks, led by gains in banks and supported by strength in Asian
markets.

Leading banks State Bank of India (SBI.BO: Quote, Profile, Research) and ICICI Bank
(ICBK.BO: Quote, Profile, Research) rose, helped by a view that economic conditions were
improving and the long-term outlook for the sector was
positive.

"At present, we believe that the operating environment for
banks is positive, with sufficient liquidity and low interest
rates," First Global Securities said in a note of Friday.

"Going forward, there will be a pick-up in credit growth,
as companies, particularly in the Infrastructure segment, are
coming back to banks for their working capital requirements and
project finance," it said.

State Bank rose 2.8 percent to 2,362 rupees while ICICI
climbed 1.6 percent to 923.75 rupees.

At 11:08 a.m. (0538 GMT), the 30-share BSE Index .BSESN
was trading up 1 percent at 17,017.64, with 26 components
gaining.

The benchmark rose above 17,000 for the first time since
Oct. 23, and has gained more than 7 percent this month.

"The market has risen in line with global markets. But, we
are still cautious as it seems to be purely a liquidity-driven
rally," said Ambareesh Baliga, vice-president of Karvy Stock
Broking.

The benchmark index is up more than three-quarters in 2009,
boosted by net foreign fund buying of nearly $15 billion of
stocks.

Metals producer Sterlite Industries (STRL.BO: Quote, Profile, Research) was up 2.9
percent at 861.90 rupees after a U.S. federal judge issued a
ruling supporting a bid by rival Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research) for
Asarco LLC. [ID:nN14494858]

J.P. Morgan said in a note that while Sterlite could appeal
against the decision, it expected it would not appeal given the
extended court process and the likely overhang on the stock.

"This, in our view, is a positive given the company would
now focus on other key events in the near term," J.P. Morgan
said.

Top vehicle maker Tata Motors (TAMO.BO: Quote, Profile, Research) rose 3 percent to
638 rupees, after the Financial Times said Jaguar Land Rover
was expected to announce it has secured a 170 million pound
working capital facility from GE Capital [GECAIC.UL]
[ID:nLG120998]

Export-driven software firms were weaker as the rupee rose
to its strongest against the dollar in nearly a month.

"We are cautious on the IT sector on an appreciating rupee
and rising cost pressure," said Baliga.

Top software services company Tata Consultancy was down 1
percent, Infosys Technologies (INFY.BO: Quote, Profile, Research) had lost 0.6 percent
and Wipro (WIPR.BO: Quote, Profile, Research) was down 0.9 percent.

In the broader market, gainers led losers in a ratio of
2.4:1 in volume of 101 million shares.

The 50-share NSE index .NSEI was up 0.9 percent at
5,045.85.

STOCKS ON THE MOVE

* UltraTech Cement (ULTC.BO: Quote, Profile, Research) was up 1.2 percent at 737.90
rupees. Its board approved issuing four shares for every seven
held in group firm Samruddhi Cement, which it will absorb to
form India's largest cement firm. [ID:nSP337897]

* Drug maker Glenmark Pharmaceuticals (GLEN.BO: Quote, Profile, Research) rose 6
percent to 235.60 rupees. It said its Glenmark Generics has
settled all pending litigation with Medicis Pharmaceutical Corp
(MRX.N: Quote, Profile, Research) relating to patent actions regarding Fluocinonide.
[ID:nBOM272584]

* Wind turbine maker Suzlon Energy (SUZL.BO: Quote, Profile, Research) rose 5.9
percent to 70.60 rupees. Its North American unit won an order
to supply wind turbines with a capacity to produce 21 megawatts
of electricity. [ID:nBMA006427]

MAIN TOP 3 BY VOLUME

* Suzlon Energy on 7 million shares

* Austral Coke APCL.BO on 2.3 million shares

* Unitech (UNTE.BO: Quote, Profile, Research) on 2.3 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report [INR/]
* India bond report [IN/]
* Dollar drifts down, euro up as yuan speculation ebbs [FRX/]
* Oil advances 1.3 pct to above $77 on dollar weakness [O/R]
* Gold hits record high, Asian shares rise [MKTS/GLOB]
* Wall St gains on retail hopes, Disney results [.N]
* For closing rates of Indian ADRs INADR
(Editing by John Mair)