* SBI again leads banks higher after strong results
* Rupee falls, hits record low after markets' close
* Consumer good stocks fall; adding to market worries
By Abhishek Vishnoi
MUMBAI, May 21 (Reuters) - Indian shares edged higher on
Monday to post its third consecutive daily gain as lenders
extended a rally after State Bank of India's strong earnings at
the end of last week boosted the outlook for the sector.
However, sentiment remained weak. Consumer good stocks such
as ITC fell to profit-taking after outperforming over
recent months, a potentially worrisome development given
defensive sectors had been among the recent winners.
Market concerns have risen as Greece's political uncertainty
casts a deep shadow over the euro zone, helping spark steep
falls in the rupee, which on Monday hit its fourth
consecutively daily all-time low against the dollar.
The rupee has declined 12.2 percent since its yearly peak to
the dollar on February 2012, while India's benchmark index has
fallen 8.8 percent in the same period. Both markets are known to
track each other's directions.
"Rupee is the lead indicator for the market as well as the
economy at this point, if rupee weakens more it can unnerve some
more positions in the market," said Paras Adenwala, chief
investment officer of Capital Portfolio Advisors
India's main 30-share BSE index ended up 0.2
percent at 16,183.26 points, marking its third consecutive daily
gain, though the index is still down 6.5 percent for the month.
The broader 50-share NSE index added 0.3 percent to
4,906.05 points.
The volatility in the rupee, which hit an all-time low after
the stock markets had closed, reflects the growing worries about
India's economic outlook.
Morgan Stanley cut its India's 2012 economic growth forecast
to 6.3 percent from its prior 6.9 percent forecast, saying the
country's "bad" growth mix -- a combination of high national
deficit and a policy of supporting consumption while private
investment slows -- has reached its limits.
Still, the gains in banks helped support broader shares on
Monday.
State Bank of India rose 3.6 percent, after already
gaining 5 percent on Friday when it posted better-than-expected
earnings.
CLSA and Bank of America-Merrill Lynch upgraded the stock
to "buy", citing asset quality improvements and the recent
under-performance in shares.
Other banks also extended a rally, with India's biggest
private lender ICICI Bank ending up 0.7 percent.
Shares in India's Reliance Capital surged 8
percent after saying this weekend it swung to a Jan-March net
profit of 3.3 billion rupees ($60.58 million) from a small loss
a year ago.
Shares in broadcast player TV Today Network,
jumped by its daily limit of 20 percent, after Aditya Birla
Group said on Friday it will buy a 27.5 percent stake in
unlisted parent company, Living Media India Ltd.
However, among decliners, India's NSE consumer goods
sub-index fell 1.4 percent.
Cigarette maker ITC lost 2 percent, and has now
lost 7.1 percent s ince hitting a record high on April 27.
Hindustan Unilever lost 1.4 percent, having lost some
3.1 percent since its record high on May 10.
Other blue chips also fell, with software services exporter
Infosys ending down 1.8 percent.
FACTORS TO WATCH
* Euro gets respite, but stays under pressure
* Brent edges up toward $108, Greece weighs
* Shares steady near lows, investors fear Greece
