Indian shares rose more than 1 percent on Thursday to their highest close in over four months on sustained buying in blue-chips such as ICICI Bank Ltd., ITC Ltd. and Hindustan Lever Ltd.

The gain was the market's seventh in the last eight trading days, and the index is just 3.1 percent below its record high of 12,671.11 points struck on May 11 this year.

The index has risen more than 30 percent so far in 2006.

We are bullish on the market due to good liquidity and other factors like stable global markets and lower inflation, said Sandeepa Vig Arora, head of institutional equities at Indiainfoline Ltd.

The market will see new highs by the end of this year with mid-caps in the lead, she said.

Shares in top private lender ICICI Bank rose 1.9 percent to Rs. 664.05, while those in top tobacco maker ITC gained 2 percent to end at Rs. 190.65.

Consumer goods maker Hindustan Lever's shares were up 3.4 percent at Rs. 258.60.

The 30-issue BSE index ended up 1.36 percent at 12,274 points, its highest close since May 12.

Gainers at 1,360 beat 1,141 losers on a volume of 213 million shares.

Market sentiment was largely positive, with only three stocks on the main index ending in the red, mostly due to profit booking.

Hero Honda Motors Ltd. fell 0.8 percent to Rs. 766.70, engineering and construction firm Larsen & Toubro Ltd. shed 0.42 percent to Rs. 2,685.45 and Reliance Communications Ltd. lost 0.6 percent at Rs. 343.55.

Foreign funds have bought Indian equities worth $ 4.6 billion so far this year. While much less than the record $ 10.7 billion in the whole of last year, $ 1.8 billion has come since the start of August.

The 50-issue NSE index was up 1.4 percent at 3,553.05 points.

Elsewhere, Karachi's 100-share index gained 1.25 percent at 10,157.95 points, while Colombo's All-Share index ended slightly lower at 2,329.27.


* Securities trading firm India Infoline Ltd. rose 3.92 percent to Rs. 178.80 after it said it planned to expand its presence in Kuwait.

* Transport Corp. of India Ltd. jumped 10 percent to Rs. 340.60 after its board approved splitting each of its equity shares into five.

* Pump maker Kirloskar Brothers Ltd. rose 6.54 percent to Rs. 386.90 after it secured two orders worth Rs. 175 crore from the Kerala Water Authority.


* Tata Teleservices Maharashtra Ltd. fell 2.4 percent on trade of 8.2 million shares.

* Dewan Housing Finance Corp Ltd. rose 11.2 percent on trade of 7.4 million shares.

* Indiabulls Financial Services Ltd. was flat after 5.2 million shares exchanged hands.