Indian shares fall 1.8 pct, Ranbaxy slides

(Updates to late morning)

MUMBAI, June 19 (Reuters) - Indian shares fell 1.8 percent
on Thursday, weighed down by political worries, concerns of a
weakening U.S. economy and high inflation.

Drug maker Ranbaxy Laboratories (RANB.BO) fell more than 6
percent, after a settlement with Pfizer (PFE.N) on a patent
dispute was seen as delaying the launch of a generic version of
cholestrol drug Lipitor.

"We had so far assumed a U.S. Lipitor launch in March 2010,
with an outside chance of a delay until June 11," Credit Suisse
analysts led by Neelkanth Mishra said in a research note.

Ranbaxy said on Wednesday it had settled most of its patent
disputes with Pfizer, allowing it to launch a generic version
of Lipitor from Nov. 30, 2011. See: [ID:nBOM222716]

"This hurts Ranbaxy as Lipitor sales are falling in the
U.S., so a 20-month delay reduces the market and present value
of opportunity," Credit Suisse said.

Ranbaxy was trading down 5.3 percent at 566.70 rupees,
after falling as low as 557.

At 11:44 a.m (0614 GMT), the benchmark 30-share BSE index
.BSESN was down 1.83 percent or 285.32 points at 15,136.99
with 25 components in the red.

"There is a lack of confidence as political uncertainty is
adding to inflation worries," K.K Mital, chief executive of
Escorts Mutual Fund, said. "Global cues are also a big dampener
today."

A meeting between the federal government and its communist
allies to break a deadlock over a nuclear deal with the United
States was postponed on Wednesday, sparking concerns about
political uncertainty. [ID:nDEL61218]

Asian stocks slid after Wall Street hit its lowest level in
three months as worries about a weak economy compounded by
credit sector concerns dragged down shares in banks, autos and
transport firms.

A Reuters poll of 12 analysts forecast the wholesale price
index INWPI=ECI to have risen to 9.82 percent in the 12
months to June 7, which would be the highest since June 3,
1995, when annual inflation was at 9.89 percent. See:
[ID:nBMA000937]

In the broader market, 1,540 losers led 705 gainers on
volume of 88 million shares. The main BSE index is down a
quarter so far this year.

The index was led down by financials as U.S. credit
concerns and expectations the Indian central bank may again
tighten monetary policy hurt banking stocks. The BSE Bank index
.BSEBANK fell 3.5 percent.

Leading lender State Bank of India (SBI.BO) dropped 3
percent to 1,310 rupees and No. 2 ICICI Bank (ICBK.BO) fell 2.6
percent to 764.90 rupees.

Top listed firm Reliance Industries Ltd (RELI.BO) shed 1.3
percent to 2,254 rupees on selling by foreign funds, traders
said.

Cement stocks bucked the trend on expectations of a price
rise, traders said. Ambuja Cement (ABUJ.BO) was up 1.1 percent
at 91.6 rupees and ACC (ACC.BO) gained 0.9 percent to 649
rupees.

Tata Steel (TISC.BO) rose 0.8 percent to 828.50 rupees
after its Corus unit said it was pursuing the sale of two
aluminium smelters. See: [ID:nL18477943].

Top aluminium maker Hindalco (HALC.BO) rose 0.6 percent to
175.35 rupees, ahead of a board meeting on Friday to consider a
rights issue of shares.

The 50-share NSE index or Nifty .NSEI was 1.08 percent
down at 4,533.20 points.

Elsewhere in the region, the Karachi's 100-share index
.KSE was down 2.59 percent at 11,944.05 points and Colombo's
All share index lost 0.04 percent to 2,439.36.

STOCKS ON THE MOVE

* KEI Industries Ltd (KEIN.BO) fell 3.2 percent to 50.45
rupees after the electrical cable maker reported a 43 percent
fall in March quarter net profit.

* Exide Industries Ltd (EXID.BO) rose 2.3 percent to 72.80
rupees after the automotive and industrial battery maker bought
a 51 percent stake in a lead smelter company for 350 million
rupees.

MAIN TOP 3 BY VOLUME

* Niraj Cement (NIRC.BO) on 4.95 million shares

* Anu's Laboratories (ANUL.BO) on 3.17 million shares

* IFCI (IFCI.BO) on 3 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee slips as stocks fall, 43/dlr key
[INR/]
* Indian bond yields rise before data, cbank eyed
[IN/]
* FOREX-Dollar falls on rate doubts given weak U.S. economy
[FRX/]
* Oil falls towards $136 as Nigeria strike averted
[O/R]
* GLOBAL MARKETS-Asia stocks tumble, bonds up on growth fears
[MKTS/GLOB]
* US STOCKS-Bank and economic fears drive Dow to 3-month
low[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Narayanan Somasundaram; Editing by Ranjit
Gangadharan)