By Prashant Mehra

MUMBAI, Nov 7 (Reuters) - Indian shares rose 2.36 percent on Friday, recovering from opening losses on gains in offshore bourses, with the market posting a second consecutive weekly gain for the first time in three months.
Reliance Industries, India's most valuable listed firm, rose 4.1 percent to 1,219 rupees, contributing most to market's rise as its shares reclaimed some of a nearly 20 percent drop over the previous two days.
Cigarette maker ITC Ltd rose 3.6 percent to 174.80 rupees and mortgage lender Housing Development Finance Corp Ltd added 2.6 percent to 1,700.50 rupees. The three shares account for about one-quarter of the main index.
"It looks like investors covered shorts, with Asian markets strong and cues from Europe were also positive. Today foreign fund selling may also have been on the lower end," said Ketan Dedhia, Managing Director at Nalanda Securities.
The main 30-share BSE index rose 230.07 points to 9,964.29, with 25 components gaining, after opening down 1.05 percent. It is still down 51 percent in 2008 to be one of the worst performing Asian markets.
The index ended the week up 1.8 percent, after rising 12.5 percent the week before, although it closed below 10,000 points for a fourth week.
In the broader market, gainers outpaced losers 1,423 to 1,131 on volume of 286.5 million shares.
The 50-share NSE index rose 2.78 percent to 2,973.00.
European shares climbed on Friday as investors sought to balance economic worries within a new era of lower interest rates ahead of key U.S. jobs data.. Most Asian indices, except Japan's Nikkei, closed higher.
"The market lacks depth. It is too early to say if FIIs are returning because overseas markets are not settled yet. We don't believe the pain is over," an institutional trader with a foreign brokerage said.
Foreign institutional investors (FIIs) have sold a net $12.6 billion of stocks so far in 2008.
Hindalco Industries, which said it had raised a $982 million foreign currency loan to repay bridging finance for a takeover, rose 6.6 percent to 60.45 rupees..
Auto firms weakened after Ashok Leyland became the latest to say it was cutting production due to falling demand. . Tata Motors, Maruti Suzuki and Mahindra and Mahindra all lost ground on the day.
State-owned Oil & Natural Gas Corp ended down 0.3 percent at 741 rupees, despite Russia¿s anti-trust office clearing its $2.6 billion takeover of Russia-focused Imperial Energy.

* Oil firms such as Bharat Petroleum Corp, Indian Oil Corp and Hindustan Petroleum Corp gained as investors factored in a reduced cost of subsidising retail fuel prices due to lower crude oil prices.
* JSW Steel Ltd fell 5.2 percent after the company said it would reduce steel production by around 20 percent from November.

* Suzlon Energy on 27.3 million shares
* GVK Power on 22.3 million shares
* Reliance Natural Resources on 11.1 million shares