Indian shares fall 0.6 pct; Bharti, ONGC drop

* Profit-taking emerges after 17.5 pct rally over past 3
wks

* Weak Asian, European markets weigh on sentiment

* ICICI Bank, Infosys among major losers
(Updates with closing prices, adds detail, analyst comments,
European markets performance)

By Pratish Narayanan

MUMBAI, Aug 4 (Reuters) - Indian shares shed 0.6 percent on
Tuesday, snapping a three-day rise, as weak overseas markets
encouraged investors to lock in profits after the market had
jumped 17.5 percent over the past three weeks.

The main index initially climbed past 16,000 points for the
first time in 14 months, but was beaten back as profit-takers
targeted outsourcer Infosys Technologies (INFY.BO) and
private-sector lender ICICI Bank (ICBK.BO).

Top telecoms firm Bharti Airtel (BRTI.BO) fell as much as
3.2 percent to 398 rupees, its lowest in almost two weeks, on
concerns it may have to sweeten its offer for a deal with South
Africa's MTN (MTNJ.J). [ID:nDEL449951]

"There is some general uncertainty about the outcome of the
MTN deal, which is an overhang on the stock," said Gajendra
Nagpal, CEO at Unicon Financial Intermediaries in New Delhi.

"Not that the deal won't happen, but at what cost? What
structure?"

State-run Oil and Natural Gas Corp (ONGC.BO) slid 3 percent
to 1,141.05 rupees after oil fell more than $1 to below $71 per
barrel as expectations of a rise in U.S. crude inventories
offset optimism from positive U.S. and Chinese manufacturing
data.

The 30-share BSE index .BSESN ended down 0.59 percent, or
93.25 points, at 15,830.98, with 19 stocks declining, It rose
as much as 0.5 percent to 16,002.46 -- its highest since June 2
last year -- during trade.

"Everybody wanted the 16,000 mark to be breached, but after
that we fell back as there are no more triggers for the market
to go up now," Arun Kejriwal, strategist at research firm KRIS,
said.

The benchmark's rally over the past three weeks has been
driven by strong domestic and global corporate earnings. The
rally swelled gains to almost 97 percent from a 2009 low in
March and 64 percent this year, stoking concerns about rich
valuations.

Among major indices tracked by Reuters, only China's and
Indonesia's benchmarks have performed better than India's BSE
index, which trades at 17.7 times one-year forward earnings.

In contrast, benchmarks in other emerging markets such as
Brazil, Indonesia and South Korea trade at a multiple of about
13, while Russia trades at 7.8 times.

The Indian market had discounted the earnings and big
reforms would be needed to spur the market upwards, analysts
said.

No. 2 outsourcer Infosys fell 1.6 percent to 2,043.65
rupees, while ICICI dropped 1.3 percent to 763.60 rupees.
Infosys had jumped 17.4 percent over the past three weeks while
ICICI's market value had risen by more than a fifth during the
period.

Bharti ended down 2.6 percent at 400.55 rupees, after
rising 7.3 percent since mid-July. Bharti and MTN are working
on a complex cash-and-stock deal to take stakes in each other
and have held exclusive talks for more than two months.

The talks were to end on July 31 but have been extended to
Aug. 31, with some analysts saying Bharti may have to cough up
more to buy the proposed stake in MTN.

In the broader market, gainers led losers 1,503 to 1,243 on
above-average volume of 484.6 million shares.

The 50-share NSE index .NSEI fell 0.7 percent to
4,680.50.

Most Asian markets fell on Tuesday, with MSCI's measure of
Asian markets other than Japan .MSCIAPJ falling 0.2 percent.
Japan's Nikkei .N225 rose 0.2 percent.

At 1028 GMT, the FTSEurofirst 300 .FTEU3 index of top
European shares was down 0.7 percent.

MAIN TOP 3 BY VOLUME

* Mahindra Satyam (SATY.BO) on 18.5 million shares

* Ispat Industries ISPT.BO on 18.3 million shares

* Suzlon Energy (SUZL.BO) on 16 million shares

STOCKS THAT MOVED

* Sical Logistics Ltd (SICA.BO) rose 4.9 percent to 42.50
rupees after it signed a memorandum of understanding with
Japan's Mitsui O.S.K. Lines to set up a joint venture for an
automotives management yard at Ennore port in southern India.

* Godrej Consumer Products Ltd (GOCP.BO) gained 3.8 percent
to 233.90 rupees on newspaper reports the company was in talks
for acquisition deals of about 10 billion rupees in China,
Latin America and the Middle East.

* IRB Infrastructure Ltd (IRBI.BO) advanced 3.6 percent to
190.20 rupees after the company said on Tuesday it had won a
contract to construct a greenfield airport in Sindhudurg
district of the western Indian state of Maharashtra.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee pares gains as stocks fall 1 pct
[INR/]
* Indian bond yields ranged; auction results eyed
[IN/]
* Euro edges down from year's high vs dlr
[FRX/]
* Oil slips below $71 ahead of expected stock build [O/R]
* Stocks, commodities slip; dollar flat [MKTS/GLOB]
* U.S. stock index futures point lower

[.N] * For closing rates of Indian ADRs

INADR (Additional reporting by Devidutta Tripathy;
Editing by Ranjit Gangadharan)