India’s benchmark stock index rose, reversing earlier losses, led by banks on a report that the Finance minister signaled he would keep the cost of borrowing at a record low.

HDFC Bank Ltd., the nation's third-biggest lender, advanced 3.5 per cent after the Hindu Business Line newspaper cited Pranab Mukherjee as saying he may continue with low interest rates until the global economy shows sufficient signs of recovery. Housing Development Finance Corp., the largest mortgage lender, rose 3.6 per cent.

Wipro Ltd., the No. 3 software services provider, gained 2.5 per cent to its highest in almost 2 1/2 years after it said it won a three-year contract from US-based Aquarion Water Co.

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 61.93, or 0.4 per cent, to 16,781.43. The gauge had earlier declined as much as 1.3 per cent. The measure has risen 74 per cent this year.

"There is a feeling that the economy is more resilient now," said Ajay Argal, who helps manage about $9.2 billion in assets at Birla Sun Life Asset Management Co. in Mumbai. "The market is showing a lot of strength as, even after moving to such a high level, it is not falling significantly."

The S&P CNX Nifty Index on the National Stock Exchange advanced 0.3 per cent to 4,986.55. The BSE 200 Index rose 0.4 per cent to 2,056.14.

HDFC Bank rose 3.5 per cent to 1,623.8 rupees, its best close since Jan. 17, 2008. Housing Development gained 3.6 per cent to 2,747.65 rupees, its highest since May 20, 2008. State Bank of India Ltd., India's biggest lender, advanced 1.2 per cent to 2,167.3 rupees. ICICI Bank Ltd., the second-biggest lender, increased 1.8 per cent to 860.45 rupees.

The government isn’t “prescribing” the introduction of a tight monetary policy now, the daily reported Mukherjee as saying. On the short-term charts, the indices are technically highly overbought, and hence a pullback can be seen after the Nifty entered the 5,100-5,150 zone, says Gautam Shah, technical analyst at JM Financial.

Wipro gained 2.5 per cent to 580.8 rupees, its highest since Apr. 18, 2007. Tata Consultancy Services Ltd., the largest software exporter, advanced 2 per cent to 602.55 rupees after it said it expects to win government orders worth as much as 30 billion rupees ($625 million) in the next 12-18 months, the Economic Times reported, citing Tanmoy Chakrabarty, vice- president and head of TCS's global government industry group.