Indian shares rise 1.6 pct, volume low on politics

By Narayanan Somasundaram

MUMBAI (Reuters) - Indian shares rose 1.6 percent on Monday, extending gains to a third straight session, but volume was light as investors awaited a confidence vote in parliament that would decide the fate of the government.

Prime Minister Manmohan Singh said he was confident about winning the confidence motion, just before of a two-day parliamentary debate began on Monday. But if the government failed the vote on Tuesday it could trigger snap elections this

year.

"Investors believe the government has a fair chance of pulling it off. Nevertheless, there is the event risk, a major one, and people would rather wait than take a call," Sandeep Neema, fund manager at JM Financial Mutual Fund said.

The main 30-share BSE index ended up 1.57 percent, or 214.64 points at 13,850.04. It briefly fell into negative territory after opening 1 percent higher but rose as much as 1.8 percent in late deals. Twenty four of its components gained.

However, total volume fell to 219 million shares from a daily average of more than 300 million, as many investors kept to the sidelines awaiting for clarity on political developments.

Losing issues led gainers 1,366 to 1,162.

Reliance Communications rallied 2.6 percent to 446.60, its highest close in nearly a month, after tie-up talks with South Africa's MTN were called off and investors saw the No. 2 mobile operator still pressing on with expansion plans.