Mumbai, Nov 03: India's key share index rallied by more than two percent early on Monday, led by autos, banks and tech issues, while Dr Reddy's Laboratories surged after it said it had received final U.S. FDA approval to launch amlodipine maleate, brokers said. Brokers said sentiment is upbeat because of strong foreign fund inflows on expectations the central bank will cut rates in its mid-year monetary policy review, to be announced later in the day, to add momentum to growth in Asia's third largest economy.

The 30-issue Bombay index was up 1.62 percent at 4,986.50 points by 10:31 a.m. It breached the psychological 5,000 level in opening deals after nearly 40 months.

Gainers outpaced losers 620 to 288 in heavy trade of 28 million shares. Dr Reddy's Laboratories Ltd surged as much as 13.5 percent to 1,357 rupees after it said it had received final U.S. Federal Drug and Administration (FDA) approval to sell amlodipine maleate, traders said.

Bajaj Auto Ltd, the nation's second largest motorcycle maker, rose 1.5 percent to 928.90 rupees after it said at the weekend it sold 107,115 motorcycles in October, up 29 percent from a year earlier.

Maruti Udyog Ltd, the nation's top car maker, climbed four percent to 336.10 rupees after it said its October vehicle sales jumped 35.2 percent to 38,715 units.

But drugmaker Cipla Ltd shed about six percent to trade at 1,222 rupees after the Bombay Stock Exchange said late on Friday that its net profit in the past quarter dropped 5.6 percent from a year earlier to 695.10 million rupees.

The Reserve Bank of India is expected to lower its benchmark bank rate from a three-decade low of six percent at its policy review to be released around noon. Foreign funds have added $1.43 billion worth of Indian shares to their portfolios in October, taking their total in 2003 to $4.5 billion, more than six times their net purchases last year. Bureau Report