Indian shares climb 2.2 pct, energy firms rise

(Updates to close)

By Hiral Vora

MUMBAI, May 15 (Reuters) - Indian shares rallied 2.2
percent on Thursday to their highest close in a week, boosted
by gains in Reliance Industries Ltd (RELI.BO: Quote, Profile, Research) and Reliance
Communications Ltd (RLCM.BO: Quote, Profile, Research), which won regulatory nod for its
unit's share sale.

A weak rupee <INR=IN>, which has depreciated about 2
percent this week, helped shares in export-driven software
services companies that get more than half their revenue from
the United States.

Traders said expectations for tax breaks for exploration,
as global oil prices remained stubbornly near record highs,
lifted energy stocks.

Reliance Industries, leading private sector oil firm, rose
3.7 percent to 2,622.65 rupees, its highest close in five days,
while state-run Oil and Natural Gas Corp (ONGC.BO: Quote, Profile, Research) and smaller
explorer Cairn India Ltd (CAIL.BO: Quote, Profile, Research) each gained 1.2 percent.

"The rise was mostly due to news driven movements in
specific index stocks, especially Reliance Industries and
Reliance Communications," said R.K. Gupta managing director of
Taurus Asset management.

"There was some short-covering also in some other leading
stocks."

Reliance Communications, India's No. 2 mobile services
firm, climbed 5.3 percent to an almost three-month closing high
of 589 rupees after sources said it had received the market
regulator's nod for an initial public offer of 10 percent in
its telecoms tower unit. See: [ID:nDEL236874].

The 30-share BSE index .BSESN closed up 2.21 percent, or
375.19 points, at 17,353.54, its highest close since May 6,
with 24 components gaining.

The benchmark, which rose 10.5 percent in April, is more
than 14 percent down in 2008 and 18.2 percent off a record high
of 21,206.77 hit on Jan. 10.

In the broader market, 1,768 gainers beat 911 losers on
volume of more than 366 million shares.

Software bellwether Infosys Technologies (INFY.BO: Quote, Profile, Research) rose 3.6
percent to 1,891.30 rupees, top exporter Tata Consultancy
Services (TCS.BO: Quote, Profile, Research) firmed 1.6 percent to 985.45 rupees and
smaller rival Wipro (WIPR.BO: Quote, Profile, Research) gained 1 percent to 508.85
rupees.

Larsen & Toubro (LART.BO: Quote, Profile, Research), India's leading engineering and
construction firm, rose 4.7 percent to 2,962.50 rupees after it
sold its ready-mix cement business to France's Lafarge
(LAFP.PA: Quote, Profile, Research) at an enterprise value of $349.5 million.
[ID:nBOM44883].

The 50-share NSE index rose 2.07 percent to
5,115.25.

Elsewhere in the region, Karachi's 100-Share index
fell 0.78 percent to 14,479.87 points, while Colombo's
All-Share index .CSE closed 0.07 percent up at 2,609.85.

STOCKS THAT MOVED

* State-run National Aluminium Co Ltd (NALU.BO: Quote, Profile, Research) rose 3.9
percent to 517.20 rupees, after its chairman said it had
shortlisted two to three coal mines in Indonesia to secure
supplies for its proposed 750 megawatt power plant.
[ID:nBOM328195].

* Kirloskar Brothers Ltd (KRBR.BO: Quote, Profile, Research) gained 4.2 percent to
250.30 rupees after its joint venture Meil-Maytas KBL received
contracts worth about 9.3 billion rupees from the southern
Andhra Pradesh government to construct pump houses.

MAIN TOP 3 BY VOLUME

* Aishwarya Telecom Ltd (AISH.BO: Quote, Profile, Research) on 70.5 million shares.

* IFCI Ltd (IFCI.BO: Quote, Profile, Research) on 21.9 million shares.

* Ispat Industries Ltd (ISPT.BO: Quote, Profile, Research) on 10.9 million shares.

FACTORS TO WATCH
* For technical analysis double-click on www.reutersindia.net
* Indian rupee above lows as oil dips, stocks rise
[INR/]
* Indian bond yields up as cash conditions tighten
[IN/]
* FOREX-Euro climbs, strong German GDP supports
[FRX/]
* Oil recovers towards $125, eyes dollar
[O/R]
* GLOBAL MARKETS-Asian stocks firm after benign U.S. inflation
[MARKETS/AS]
* US STOCKS- US retailers in focus, Wall St set for modest
rise

[.N]
* For closing rates of Indian ADRs
INADR
(Editing by Ranjit Gangadharan)