Sensex heads for biggest gain in nearly 7 weeks on Fed comments

MUMBAI (Reuters) - Indian shares rose more than 1 percent on Thursday, heading for their biggest single-day gain in nearly seven weeks, tracking higher Asian markets on bets the U.S. Federal Reserve would raise rates in December but proceed cautiously on more tightening.

Federal Reserve officials on Wednesday continued to flag December as a likely time for interest rates to rise, while conditioning further rate hikes on the state of the U.S. economy.

The gains allowed indexes to recover from losses on Wednesday, when the Sensex recorded its biggest single-day percentage fall in nearly two months.

"U.S. Fed comments, Paris attacks being contained and since we were oversold there is some selective buying going on," said, Alex Mathews, head of research at Geojit BNP Paribas.

The Sensex was 1.37 percent higher, heading for its biggest single-day percentage gain since Oct. 5.

The Nifty gained 1.34 percent, also on track for its biggest single-day percentage gain since Oct. 5. Both indexes gained as much as 1.46 percent earlier and were heading for their highest close since Nov. 11.

All sectors were trading in the green with strong gains made by financial and IT stocks that were beaten down in the previous session.

Hero MotoCorp shares rose more than 3 percent, lifting other automobile stocks after the company said its retail sales crossed 1 million units in the festive season.

TVS Motor Co was up 1.9 percent, while Maruti Suzuki gained 2.3 percent.

Meanwhile, Dr. Reddy's Laboratories shares recovered to trade 2.5 percent lower after falling as much as 6.8 percent earlier in the day after the drugmaker said it followed all disclosure norms required by the U.S. and Indian regulators.

The stock fell after U.S. law firm Lundin Law made a class action appeal over allegations of misleading statements from the Indian drugmaker.

(Reporting by Karen Rebelo in Mumbai; Editing by Subhranshu Sahu)