Indian shares tread water, Reliance Comm falls

(Updates to mid-morning)

MUMBAI, June 17 (Reuters) - Indian shares treaded water on
Tuesday as investors were wary about high global oil prices and
inflation, while Reliance Communications (RLCM.BO) fell again
on worries a family feud could delay a multi-billion dollar
deal.

Traders said the outlook was marred by oil prices, which
climbed to a record overnight at near $140 a barrel. Prices
eased to below $135 on Tuesday, but could still hurt India that
imports 70 percent of oil. See: [ID:nSIN101381]

"Till you see oil prices cooling, the market will lack
conviction. It is crucial for inflation and our economic
health," said Nikunj Doshi, investment manager at Envision
Capital.

Inflation raced to its highest in seven years at the end of
May at 8.75 percent, and is expected to top 10 percent this
month as higher fuel prices feed in. [ID:nDEL47629].

At 11:07 a.m (0537 GMT), the benchmark BSE 30-share index
.BSESN was up 0.03 percent or 4.20 points at 15,400.02, with
23 components rising.

In the broader market 1,223 gainers led 851 losers on
volume of 70.1 million shares.

No. 2 mobile operator Reliance Communications fell for a
second day, dropping 1.6 percent to 526.70 rupees, on concern a
family feud could delay a multi-billion dollar tie-up with
South Africa's MTN (MTNJ.J).

Stocks such as top listed firm Reliance Industries Ltd
(RELI.BO), biggest mobile operator Bharti Airtel (BRTI.BO) and
No. 2 lender ICICI Bank (ICBK.BO), met with resistance after
rising the previous day, traders said.

Reliance Industries was down 0.7 percent at 2,269 rupees,
Bharti dropped 1 percent to 830 rupees and ICICI shed 1.3
percent to 788.30.

Top domestic airline Jet Airways (JET.BO) was up 1.9
percent at 544 rupees after the Mint newspaper said Reliance
Industries was in talks to buy a 6-7 percent stake in the
carrier.

The 50-share NSE index or Nifty was up 0.02 percent
at 4,573.95 points.

Elsewhere in the region, the Karachi's 100-share index
was 2 percent down at 12,191.39 points, but Colombo's
All share index .CSE was 0.1 percent higher at 2,446.77.

STOCKS ON THE MOVE

* Torrent Pharmaceuticals (TORP.BO) was up 12.9 percent at
174.05 rupees after 1.72 million shares, or 2.03 percent of its
equity, changed hands on the BSE in a block deal at 158 rupees
each.

* South Indian Bank (SIBK.BO) rose 5.3 percent to 129.80
rupees after it said it would consider a bonus share issue on
June 28. Ahead of the announcement the shares had touched a
high of 146 rupees.

MAIN TOP 3 BY VOLUME

* Chambal Fertilisers & Chemicals (CHMB.BO) on 4.72 million
shares

* Anus Laboratories (ANUL.BO) at 4.2 million shares

* Nagarjuna Fertilizers & Chemicals (NGFR.BO) on 3.8
million shares.

FACTORS TO WATCH
* Indian rupee steady, concerns on fund flow persist
[INR/]
* Indian bond yields soften, supply still a worry
[IN/]
* FOREX-Dollar falls as investors trim outlook on Fed rate
[FRX/]
* Oil flat, weigh Saudi output after fall from high
[O/R]
* GLOBAL MARKETS-Dollar falls as US rate rises less certain
[MKTS/GLOB]
* US STOCKS- US STOCKS-Optimism about tech spending lifts
Nasdaq

[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Narayanan Somasundaram; Editing by Ranjit
Gangadharan)