Indian shares fall 0.1 pct; Reliance, ICICI drop

* Weak U.S. data, lower Asian markets weigh on sentiment

* Reliance Industries falls for 2nd day after court ruling

* Sterlite drops on lower copper prices

* Some buying seen by long-term investors - traders (Updates to late morning)

MUMBAI, June 16 (Reuters) - Indian shares fell 0.1 percent on Tuesday as tepid U.S. regional manufacturing data dented optimism across Asia and sparked profit-taking on an 85 percent rally since early March.

But traders said there was some buying as some longer-term investors took advantage of the drop to enter the market and the index erased earlier losses of up to 1.7 percent.

"There is no doubt this is a healthy correction. The market has held up very well recently, and so we could see some consolidation over the next few sessions," Hitesh Agrawal, head of research at Angel Stock Broking, said.

Reliance Industries (RELI.BO) extended losses into a second session, a day after a court asked the billionaire Mukesh Ambani-controlled energy group to sell gas at half the government-approved price to his estranged brother's firm. [ID:nBOM433343]

Reliance fell 1 percent to 2,158 rupees, after dropping 7.5 percent in the previous session.

Non-ferrous metals producer Sterlite Industries (STRL.BO) fell 5 percent as copper prices in China retreated for a fourth straight day on Tuesday. [ID:nSP467637]

Top telecoms firm Bharti Airtel (BRTI.BO), which is in exclusive merger talks with South Africa's MTN (MTNJ.J), was another major heavyweight drag on the index, down 1.4 percent at 807 rupees.

By 11:15 a.m. (0545 GMT), the 30-share BSE index .BSESN was down 0.1 percent at 14,855 points, with 18 stocks declining, after falling as much as 1.7 percent earlier.

Government-run State Bank of India (SBI.BO) rose 4 percent and engineering and construction firm Larsen & Toubro (LART.BO) gained 1.1 percent to 1,523.50 rupees to limit losses.

The Indian market has raced up 85 percent from a 2009 low in early March, largely driven by foreign funds which pumped more than $7.5 billion into the market since mid-March on growing optimism the world economy was healing.

The stock market also received a boost after the ruling Congress-led coalition was re-elected last month, raising hopes that the strong election mandate may encourage the government to accelerate investor-friendly economic and financial reforms.

But concerns have emerged about expensive valuations, with niggling worries about the global economy, uncertainty about proposed reforms and an uncertain outlook for corporate earnings growth weighing on investor confidence.