Indian shares erased early losses of 2.3 percent and rose 0.2 percent on Wednesday, as strong investor appetite for risk helped overcome a weak forecast by blue-chip outsourcer Infosys Technologies. Infosys issued a downbeat forecast for 2009/10 as a global downturn squeezes outsourcing, sending its shares down as much as 7.7 percent, after the No. 2 software exporter beat forecasts with 29 percent jump in quarterly profit. 'Temporarily, Infosys definitely dampened sentiment. But from a broader perspective, the market is really strong. After a long time, there are lots of liquidity coming in,' Vaibhav Agrawal, an analyst at Angel Stock Broking Ltd, said. Energy giant Reliance Industries and diversified engineering and construction firm Larsen & Toubro powered the main index higher. By 11:52 a.m. (0622 GMT), the 30-share BSE index was up 0.2 percent at 10,991.04 points, with 21 stocks advancing. The benchmark had fallen to 10,719.18 in early deals. If the gains are held till close, the benchmark would have risen for eight consecutive sessions for the first time in 1 ½ years. Reliance industries, which has the biggest weight in the index, rose 0.7 percent to 1,782.35 rupees. Larsen, which lost the race to buy a controlling stake in fraud-hit outsourcer Satyam Computer on Tuesday, rose 2.7 percent to 846 rupees. Analysts had warned the possible acquisition would distract Larsen from its core engineering and construction business. Infosys was down 4.7 percent at 1,342 rupees, while bigger rival Tata Consultancy Services and third-largest Wipro fell 2.4 percent each. 'It is clear that IT companies are going through a bad patch, but things are going to improve, may be in another six months,' K.K. Mital, head of portfolio management services at Globe Capital in New Delhi, said. In the broader section, advancers outstripped losers in the ratio of more than 4:1 on moderate volume of 286.8 million shares. The 50-share NSE index was up 0.6 percent at 3,404.45. Asian stocks pulled back from six-month highs on Wednesday after the drop on Wall Street overnight. Japan's Nikkei was down 1.1 percent, while MSCI's measure of other Asian markets fell 1.4 percent. MAIN TOP 3 BY VOLUME * Reliance Natural Resources on 11.2 million shares * Rolta India on 9.2 million shares * Unitech on 7.4 million shares STOCKS THAT MOVED * SKF India rose 7.1 percent to 178 rupees after about 1.3 million shares, or 2.5 percent equity, changed hands in a block deal on the BSE at 170.25 rupees each. * CMC Ltd jumped 40.2 percent to 530 rupees after the company reported late on Monday a 26 percent increase in its consolidated net profit for fiscal 2009 and higher dividend of 15 rupees per share. FACTORS TO WATCH * For technical analysis double click on www.reutersindia.net * Indian rupee drops from 1-½ month high; stocks eyed * Indian bond yields down as excessive cash helps * Dollar and yen gain as stocks decline * Oil hovers above $49, eyes US inventory data * Asia stocks retreat, China hopes limit drop * Weak retail sales, Goldman hit Wall St; eBay up late * For closing rates of Indian ADRs

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