Indian shares to fall on concerns about global economy

MUMBAI, June 16 (Reuters) - Indian shares are expected to
drop on Tuesday, as downbeat U.S. regional manufacturing data
revived concerns about the health of the global economy and
soured sentiment across Asia.

Metals firms Sterlite Industries (STRL.BO) and Hindalco
Industries (HALC.BO) will be watched as copper prices MCU3
fell for a fourth day on Tuesday. [ID:nSP467637]

Energy giant Reliance Industries (RELI.BO) and state-run
explorer Oil and Natural Gas Corp (ONGC.BO) will be on the
radar as oil prices fell for a third day towards $70 a barrel.

The Indian market has raced up almost 90 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 shares are seen pricey, with niggling worries about the
global economy, uncertainty about proposed reforms and an
uncertain outlook for corporate earnings growth weighing on
investor confidence.

Traders said investors would remain cautious ahead of the
annual budget in early July, when the coalition is expected to
announce reform plans to boost sagging economic growth and
tackle a yawing fiscal deficit.

Asian markets were lower on Tuesday, with Japan's Nikkei
.N225 down 2.6 percent by 0344 GMT, while MSCI's measure of
other Asian markets .MSCIAPJ fell 2.1 percent.

U.S. equities marked their worst slide in a month on Monday
after the New York Fed's Empire State general business
conditions index showed the factory sector shrank at a much
more severe rate in June than the previous month.

Nifty futures traded in Singapore SINc1 were down 2.3
percent, pointing to a lower opening in India.

The 30-share BSE index .BSESN ended down 2.38 percent, or
362.42 points, at 14,875.52, its lowest close in a week,
dragged by Reliance 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.
--------------------MARKET SNAPSHOT AT 0346 GMT--------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 923.72 -2.38% -22.490
USD/JPY JPY= 96.64 -1.23% -1.200
10-YR US TSY YLD US10YT=RR 3.6899 -- -0.025
SPOT GOLD XAU= 931.3 0.37% 3.450
US CRUDE CLc1 70.08 -0.76% -0.540
DOW JONES .DJI 8612.13 -2.13% -187.13
ASIA ADRS .BKAS 109.80 -3.71% -4.23
-------------------------------------------------------------

STOCKS TO WATCH

* Indian generic drugmaker Dr Reddy's Laboratories
(REDY.BO), after it signed an alliance with GlaxoSmithKline
(GSK.L). [ID:nLF635888]

* Shipping Corp of India (SCI.BO) after the state-run
shipping firm posted a 19 percent drop in net profit in the
March quarter to 2 billion rupees. [ID:nBOM404580]

* India's Yes Bank (YESB.BO) after a senior bank official
said it expects a $150 million Tanzanian rice and wheat project
to reach full production by 2011, the first of several large
African farms it is funding. [ID:nLF445667]
FACTORS TO WATCH
* For technical analysis, double click on
www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Yen gains broadly as investors grow wary on economy
[FRX/]
* Oil falls for a 3rd day towards $70 as dollar firms
[O/R]
* Global stocks slip, US dollar jumps on weak data
[MKTS/GLOB]
* Wall St sees worst day in a month on resources, data
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Pratish Narayanan and Jasudha Kirpalani;
Editing
by Saeed Azhar)