Indian shares down 0.3 pct; Infosys up, banks fall

* Infosys sees FY10 revenue, EPS falling less than expected

* Banks down on profit sales after recent run up
(Updates to midday)

MUMBAI, Oct 9 (Reuters) - Indian shares dropped 0.3 percent
on Friday, led by banks as investors took profits after the
market had started strongly on a rally by outsourcer Infosys
Technologies (INFY.BO) that upgraded its full-year forecast.

State Bank of India (SBI.BO) and ICICI Bank (ICBK.BO), the
top two lenders in the country, fell more than 1 percent after
the sector index .BSEBANK had climbed over 18 percent since
the start of September.

Infosys added 3.7 percent initially after the No. 2
outsourcer posted a 7.5 percent rise in quarterly profit and
said full-year revenue and earnings would drop less than
expected as demand for outsourcing grows and pricing pressure
eases. [ID:nBOM369212]

The stock, however, pared gains and were trading up 0.85
percent at 2,230 rupees by 12:02 p.m. (0632 GMT) as the market
came off.

The 30-share BSE index .BSESN was down 0.27 percent at
16,797.34 points, after rising as much as 0.7 percent in early
deals. Nineteen of its components were in the red.

"Investors are cautious as valuations seem stretched," said
Gajendra Nagpal, founder and CEO of Unicon Financial. "Sectoral
rotation is taking place."

He said there was money waiting on the sidelines but
investors were wary ahead of the results.

State Bank of India was down 2.8 percent at 2,056.10 rupees
while private lender ICICI Bank fell 1.6 percent to 907.55
rupees.

Leading vehicle maker Tata Motors (TAMO.BO) shed 5.1
percent to 557.60 rupees after a source said the company was
raising about $750 million through global depositary receipts
and convertible bonds. [ID:nBOM502855]

Top mobile operator Bharti Airtel (BRTI.BO) climbed 3.7
percent and rival Reliance Communications (RLCM.BO) gained 2.7
percent, after slumping more than 20 percent over the last four
sessions on profitability concerns.

In the broader market, gainers outpaced losers in the ratio
of 1.2:1 on relatively lower volume of 191 million shares.

The 50-share NSE index .NSEI was down 0.5 percent at
4,979.15.

STOCKS ON THE MOVE

* Power equipment maker Siemens Ltd (SIEM.BO) rose as much
as 3.2 percent to 605 rupees after it said on Thursday its
consortium with parent Siemens AG (SIEGn.DE) won an export
order worth 4.03 billion rupees. [ID:nBMB008656]

* Software services firm Mastek (MAST.BO) was down 5.4
percent at 280.40 rupees, after it reported a nearly 36 percent
drop in quarterly net profit.

MAIN TOP 3 BY VOLUME

* Pipavav Shipyard (PIPA.BO) on 19 million shares

* Unitech (UNTE.BO) on 4.2 million shares

* Ispat Industries ISPT.BO on 4.1 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report
[INR/]
* India bond report
[IN/]
* Dollar gets a reprieve after Bernanke remarks
[FRX/]
* Oil falls toward $71 as dollar firms on Fed comments
[O/R]
* Asia shares hit 14-mth high, dollar rebounds
[MKTS/GLOB]
* Wall St gains as Alcoa's profit bolsters optimism
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; Editing by Ranjit Gangadharan)