Indian shares down 0.5 pct; banks, Tata Steel fall

* Face resistance after previous day's rally

* Banks down on profit sales after recent gains

* Tata Steel falls on securities swap plan

* Infosys gains as BPO arm acquires U.S. firm
(Updates to late morning)

MUMBAI, Nov 12 (Reuters) - Indian shares were trading 0.5
percent lower in choppy trade on Thursday as Asian markets
reversed gains and investors locked in profits after the
previous day's rally.

Leading lenders State Bank of India (SBI.BO), ICICI Bank
(ICBK.BO) and HDFC Bank (HDBK.BO) led the losses, after they
had rallied this month. The sector index .BSEBANK shed 1.5
percent, but is still up 9.5 percent since the end of October.

State Bank was down 2 percent at 2,331 rupees while ICICI
and HDFC Bank shed 2 percent and 0.7 percent respectively.

By 11:52 a.m. (0622 GMT), the 30-share BSE index .BSESN
was down 0.51 percent at 16,763.83, after rising 2.5 percent on
Wednesday. Seventeen of its components declined.

The benchmark is still up 5.4 percent so far in November.

"There is resistance as we are moving higher, which is why
the market is fluctuating but the undertone is bullish," said
Mehul Dedhia, assistant vice president of sales at Sharekhan.

Investors also waited September factory output data which
is due by midday (0630 GMT).

Industrial output INIP=ECI in September is expected to
have risen 7.3 percent from a year earlier, lower than a
provisional 10.4 percent rise in August data, a Reuters poll
showed. [ID:nDEL440209].

Tata Steel (TISC.BO) shed as much as 3.5 percent after the
company approved a new convertible bonds offer in exchange for
an existing $875 million securities and lowered the conversion
price. [ID:nBOM293627]

"I think the company was not confident of its stock
reaching that price, which means it would face a big redemption
in a single year," said Pawan Burde, sector analyst at
Mumbai-based PINC Research.

"This probably reflects their concerns over growth amid the
downturn in the global steel industry," he said.

The stock was later down 2.9 percent at 511.20 rupees.

Infosys Technologies (INFY.BO) rose 0.3 percent to 2,318.40
rupees after its business process outsourcing arm said it was
in a pact to acquire U.S.-based McCamish Systems.
[ID:nBMA006412]

In the broader market, losers outpaced gainers in a ratio
of 1.1:1 on volume of 253 million shares.

The 50-share NSE index was down 0.7 percent at
4,969.40.

STOCKS ON THE MOVE

* Wind turbine maker Suzlon Energy (SUZL.BO) rose 2.1
percent to 69.10 rupees after it was added to the MSCI India
Index. [ID:nN11332167]

* Drug maker Glenmark Pharmaceuticals (GLEN.BO) and Power
Grid Corp (PGRD.BO) shed 2.3 percent and 1.8 percent
respectively, as they were removed from the MSCI India index.

* Indiabulls Real Estate (INRL.BO) was down 2.3 percent at
237.80 rupees after about 16 percent of its equity changed
hands on the Bombay Stock Exchange. [ID:nBMB009066]

MAIN TOP 3 BY VOLUME

* Indiabulls Real Estate on 65.5 million shares

* Suzlon Energy on 6.8 million shares

* Mahindra Satyam (SATY.BO) on 5.4 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report
[INR/]
* India bond report
[IN/]
* Dlr near lows, Aussie hits 15-mth high after data
[FRX/]
* Oil steady above $79; eyes on U.S. data, dollar
[O/R]
* Asia shares edge higher, gold hits new record
[MKTS/GLOB]
* Market gains on homebuilder forecast, China data
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; Additional reporting by Prashant
Mehra; Editing by Ranjit Gangadharan)