The noose wand is used in the Hunter skill to catch kebbits while tracking. It can also be wielded. Once a Kebbit has been found, equipping the noose wand allows the character to catch the Kebbit. Without the noose wand a Kebbit will simply be scared off.
You can also use the level 71 spell 'Hunter Kit' from the lunar spellbook which among other hunter items, will give you a noose wand. You must have completed both the Lunar Diplomacy and Dream Mentor quests to use this spell.
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