India's stock index edges up 1.5 percent

After rallying more than 4 percent in the morning, the benchmark Sensex shed early gains to close up 174.31 points, or 1.54 percent, at 11,483.

Information technology companies, which have been hard hit in recent weeks as investors fretted about their large exposure to U.S. financial services firms, led the rise.

Infosys Technologies Ltd. rose 5.87 percent, while Satyam Computer Services Ltd. ended up 7.38 percent.

ICICI Bank Ltd., the nation's largest private bank, which has also been battered in recent weeks, rose 5.18 percent.

Metals companies fell on concerns about softening global commodities prices and slack demand from China.

Rajesh Jain, CEO of Pranav Securities, a Mumbai brokerage, said it's too early to predict a bottom. Any bad news, he said, can send stocks reeling 5 to 10 percent.

But, he said, once institutional buying kicks up again--which he believes may happen early next year--he believes India is well-positioned for a rebound.

"The fundamentals of India are strong compared to the rest of the world," he said.