Indian shares rallied 2.1 percent on Monday and stretched gains into a third consecutive session, on hopes a recovery in the U.S. banking sector could help support an economic turnaround. A strong performance in Asian stocks and firmer European markets also underpinned the rise after shares had faltered in the morning, falling as much as 0.7 percent at one stage. 'The market is still trying to find its legs... but this definitely is the right place and right spot to buy,' Gul Teckchandani, an independent investment strategist, said. The 30-share BSE index rose 2.13 percent, or 186.93 points, to 8,943.54, its best close since Feb. 26. Twenty-five stocks advanced. The benchmark has gained 9.1 percent over five trading sessions. Reliance Industries, India's largest listed firm with the biggest weight in the main index, and leading lenders such as ICICI Bank and State Bank of India led the gains. India's central bank governor told BBC the country's growth was expected to pick up faster than the rest of the world when a global revival begins. 'India can be a growth engine. Not that India can recover ahead of the world. But when recovery starts, India's recovery is going to be sharp and rapid,' Duvvuri Subbarao said in an interview with BBC World broadcast on Sunday. Energy giant Reliance Industries climbed 3.5 percent to 1,326.60 rupees, while government-run State Bank of India gained 3.7 percent to 987.80 rupees. Private lender ICICI Bank gained 4.5 percent to 322.65 rupees. Bharti Airtel, which slumped 7.2 percent last week after news its chief executive had sold his holding in the firm, recovered 2.4 percent to 571.95 rupees on a newspaper report it would restructure its businesses next month as it looks to expand beyond voice telephony. In the broader section, advancers led losers in the ratio of almost 2:1 on moderate volume of 303.2 million shares. The 50-share NSE index closed up 2.13 percent at 2.777.25. Traders said they expected the market to remain choppy in the near term till there were clearer signals of the global economy healing. 'This rally could stretch a little more, but then we might see a cooling off,' R. Sriram, a technical analyst at ICICI Securities, said. Asian stocks struck a one-month high on Monday and European shares jumped for a fifth straight session as reassurances over the health of the U.S. banking sector sparked a broad recovery in investor appetite for risk.] MAIN TOP 3 BY VOLUME * Reliance Natural Resources on 20.9 million shares * Unitech on 13.9 million shares * Pennar Industries Ltd on 13.3 million shares STOCKS THAT MOVED * HCL Technologies Ltd rose 5.6 percent to 101.55 rupees after the company said it won an outsourcing contract worth $350 million from the Readers Digest Association over seven years. * Pennar Industries rose 9.6 percent to 17.75 rupees after about 13 million shares, or 10.2 percent of equity, changed hands in a block deal on BSE at 15.80 rupees each. * Pantaloon Retail (India) Ltd rose 5.6 percent to 130.15 rupees after India's largest listed retailer said after market hours on Friday that February sales rose 31.25 percent on-year to 5.35 billion rupees. FACTORS TO WATCH * For technical analysis double click on www.reutersindia.net * Indian rupee up on shares rally, stronger Asian units * Indian bond yields lower; buyback results eyed * Euro rises above $1.30 vs dlr after inflation data * Oil falls to $44 after OPEC keeps output steady * Equities up for 5th session in row on econ hope * US index futures up, signalling firm Wall St start

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