Indian shares seen rising on last day of 2008

BANGALORE, Dec 31 (Reuters) - Indian shares are expected to
climb on the last day of 2008, on hopes for an economic
stimulus package and interest rate cuts. Higher world markets
will also underpin sentiment.
Shares in energy group Reliance Industries (RELI.BO) will be
watched after Standard & Poor's revised its rating outlook on
the company to negative from stable, citing its increased debt
and pressure on profitability. [ID:nWNA3238]

State-run Oil and Natural Gas Corp (ONGC.BO) will be in
focus after more than 90 percent of Imperial Energy investors
accepted a 1.3 billion pounds ($1.88 billion) takeover bid from
the Indian oil company. [ID:nLU88079]

"The market mood is likely to remain good today as
investors continue to bet on a stimulus package for the economy
and a further reduction in interest rates," said R.K. Gupta,
managing director of Taurus Mutual Fund.

India's central bank governor met the prime minister on
Monday ahead of next month's scheduled policy review by the
bank, and a senior government official said further fiscal
steps to lift a slowing economy were expected soon.

On Tuesday, the 30-share BSE index rose 1.92
percent to 9,716.16. It has plummeted about 52 percent this
year and is on course to post its first yearly fall since 2001,
as foreign funds, rattled by the global slowdown and tight
credit, sold a net $13.4 billion of Indian shares this year.

"The downside from this level looks limited, but the
market's direction in the near term will be determined by the
corporate earnings," Gupta said.

By 0344 GMT, Hong Kong .HSI was up 1.6 percent and Sydney
.AXJO was trading 1.8 percent higher. Japan and South Korea
markets were shut. The Nifty futures traded in Singapore
SINc1 was up 1.2 percent.
--------------MARKETS SNAPSHOT AT 0347 GMT------------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 890.64 2.44% 21.220
USD/JPY JPY= 90.36 0.2% 0.180
10-YR US TSY YLD US10YT=RR 2.0676 -- 0.013
SPOT GOLD XAU= 866.45 -0.65% -5.650
US CRUDE CLc1 38.76 -0.69% -0.270
DOW JONES .DJI 8668.39 2.17% 184.46
ASIA ADRS .BKAS 94.14 2.26% 2.08
-------------------------------------------------------------

STOCKS TO WATCH

* UCO Bank (UCBK.BO) after the state-run bank said the
federal government's stake would fall to 63.59 percent as a
result of a capital restructuring scheme. [ID:nBOM362080]

* Swaraj Mazda (SWRJ.BO) after Japan's Sumitomo Corp
(8053.T) agreed to buy a 14.04 percent stake from Punjab
Tractors PTRA.BO, a unit of Mahindra & Mahindra (MAHM.BO), at
272 rupees per share. The deal will raise Sumitomo's holding in
the Indian truck maker to 53.52 percent. [ID:nBMB004078]

* Taneja Aerospace & Aviation Ltd (TANE.BO) after Citigroup
Global Market Mauritius Pvt Ltd said on Tuesday it had sold
three million shares or 12.03 percent of equity at 29 rupees
each.

FACTORS TO WATCH
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* FOREX-Euro best of a bad bunch as rates diverge
[FRX/]
* Oil steady below $39, heads for worst year ever
[O/R]
* GLOBAL MARKETS-Stocks rise, shrug off grim US data, oil
drops [MKTS/GLOB]
* US STOCKS- Wall St gains as latest auto bailout raises hopes
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Sumeet Chatterjee & Sowmya Kamath; Editing by
Ranjit Gangadharan)