MUMBAI: India’s Sensitive Index rose for a third day, recouping most of a three-day, 7+ACU- drop, after the Dow Jones Industrial Average climbed to a record and metals prices rose.

+IBw-Positive global cues and some amount of short covering after the recent sell-off are boosting stocks here,+IB0- said Nitin Jain, who helps manage about +ACQ-563mn of Indian stocks at Kotak Mahindra Asset Management Co in Mumbai.

The Mumbai Stock Exchange’s Sensitive Index, or Sensex, rose 127.36, or 0.9+ACU-, to 13,614.52. The index posted a three-day, 4.8+ACU- gain. For the week it fell 2.3+ACU-, its second weekly drop.

The S+ACY-P/CNX Nifty Index on the National Stock Exchange advanced 45.60, or 1.2+ACU-, to 3888.65.

Infosys, the nation’s second-biggest software exporter, rose Rs34.5, or 1.6+ACU-, to 2,232.3, while Satyam Computer Services Ltd, India’s fourth-largest computer-services provider, gained Rs9.7, or 2.1+ACU-, to 477.3.

Overseas investors sold a net Rs969mn (+ACQ-21.6mn) of Indian shares on December 13, the Securities +ACY- Exchange Board of India said.

Ranbaxy Laboratories added Rs4.30, or 1.2+ACU-, to 375.1. The nation’s biggest drug-maker won final US regulatory approval to make and sell its version of Bristol-Myers Squibb Co’s Cefzil, the company said in a statement on Thursday.

Reliance Communications surged Rs19.3, or 4.3+ACU-, to a record 466.65, extending a two-day 11+ACU- rally on speculation Reliance Communications, the nation’s second-biggest mobile phone operator, is in talks to buy the Indian unit of Hutchison Telecommunications International Ltd (2332 HK).

Reliance Communications and Blackstone Group, manager of the world’s biggest buyout fund, and may offer about +ACQ-14bn to buy Hutchison Essar Ltd, two people with direct knowledge of the transaction said.

Reliance Communications +IBw-is the most likely suitor in conjunction with private equity firms,+IB0- analysts Elinor Leung and Francis Cheung at CLSA Ltd said in a note to clients yesterday.

Reliance has the most to gain operationally by buying out Hutchison Essar Ltd as it will become India’s largest operator with 36+ACU- market share, according to the note. Reliance has the best chance to do a deal as it has the most synergies, the note said.

Tata Motors climbed Rs4.45, or 0.5+ACU-, to 857.8. The nation’s biggest truck-maker, which also makes passenger cars, and Fiat Auto, Italy’s largest car-maker, will invest as much as +ACQ-895mn to make cars and parts in India, the two companies said in a statement on Thursday.

The venture will have the capacity to make more than 100,000 cars and 200,000 engines and transmissions when it starts production from early 2008. Fiat will also make its Grande Punto hatchback and Linea sedan in India.

The Indian rupee, meanwhile, is set to gain next week on speculation capital flows will increase in the new year as overseas funds allocate more for Indian assets as the economy sustains its pace of growth.

Global investors remained net buyers of equities this week even as sales by domestic funds pushed the benchmark index to the lowest in more than a month on December 12.

Foreign direct investment also may increase, helping the rupee extend gains to almost an eight-year high by March, said Yeo Han Sia, a currency strategist at Bank of America in Singapore. +IBw-The rupee will benefit from increasing inflows of foreign capital, especially long-term investments,+IB0- said Yeo. +IBw-The currency will increasingly rely on direct investments.+IB0- - Bloomberg