Banking and financial shares surged on hopes of a rate cut from the Reserve Bank of India following rate cuts in the U.S. and Hong Kong.

Housing Development Finance Company climbed 3.2% to 2,560 rupees. ICICI Bank, gained 4.9% to 1179.7 rupees, and State Bank of India 8.6% to 2,344 rupees.

HDFC Bank jumped 6.8% to 1,538 rupees. On Monday, HDFC Bank reported 45.2% rise in net profit to 429.36 rupees on 59.7% rise in total income to 3,405.79 crore rupees during the third quarter of December 2007 over the third quarter of 2006.

Grasim Industries rose 4.8% to 2,996 rupees. The company during trading hours on Tuesday reported 34.6% rise in net profit to 553.79 crore rupees on 15.9% rise in total income to 2,694.96 crore rupees during the December 2007 third quarter over December 2006 third quarter.

Tata Motors rose 1.8% to 669.80 rupees on reports that the company has signed a development contract with Chrysler LLC for developing electric vehicles.

6:00AM New York, 6:00PM Hong Kong - Hong Kong stock index surged 10% in record one day rise. Analysts predicted that the rally may falter in the weeks ahead.

Hong Kong stock indexes soared on record one-day rise led by financial and realty stocks after the U.S. Federal Reserve slashed its benchmark interest rate. The magnitude of the rate cut surprised the market. The sharp rise in the market averages may not sustain in the coming weeks if the U.S. economy continues to weaken.

In Hong Kong trading Hang Seng Index climbed from a two-day 14% decline to close up 11% or 2,332.54 to 24,090.17, the steepest ascent since 1998, while the Hang Seng China Enterprises Index rose 11% or 1,367.62 to 13,279.53, the most since September 1998.

Daily turnover on the main-board was HK$156.4 billion compared to HK$155.8 billion yesterday.

All stocks on the 43-member Hang Seng Index advanced.

Hong Kong Monetary Authority today cut its key rate to 5% from 5.75% in tandem with the U.S. Federal Reserve which slashed its benchmark rate o 3.5% from 4.25%.

HSBC Holdings, Standard Chartered Bank and the Bank of East Asia also cut rates by 75 basis points to 6%, sparking expectations that this will encourage economic growth.

Analysts at Credit Suisse and Celestial Asia Securities Holdings said today’s rally may be short-lived.

Realty stocks rose on expectations that demand for real estate in Hong Kong will rebound after the cut in the base rate by the U.S. Federal Reserve. Sun Hung Kai soared 9.3% to HK$154.90, Cheung Kong Holdings Limited climbed 10% to HK$130 and Hang Lung gained 9.9% to HK$29.50.

Financial stocks also rallied. Bank of Communications surged or 13% to HK$8.90 after reporting today that profit rose more than 60% in 2007, and earnings growth to Rmb 12.55 billion in 2006.

Bank of China added 8.1% to HK$3.33 after dismissing reports in The South China Morning Post newspaper that the bank may post a loss due to investments in subprime mortgages, adding that profits rose last year.

HSBC reversed a three-day 12% decline to close up 11% to HK$116.20.

Jiangxi Copper Co. plunged 19% to HK$16.60, its biggest drop since January 1998, after the shares ended a week-long suspension. The Company halted trading last week to announce a plan to sell Rmb 6.8 billion of bonds with warrants.

China Unicom surged 15% to HK$17.04 after Goldman Sachs lifted its rating on the stock from ``neutral,’’ to “buy. China Mobile, the world''s largest cellular operator rose 10.5% to HK$120.3

New World Development Co.''s public works and transportation arm, added 4.1% to HK$19.80. PetroChina Co Limited closed up17.5% to HK$11.