Indian shares rise 0.2 pct; Bharti falls 5.4 pct

* Telecom Bharti in talks to buy stake in South Africa's
MTN

* A deal could dilute earnings initially, says Bharti

* Sterlite up on firm metal prices; Ranbaxy up as CEO quits

* Trading choppy after last week's 14.1 pct rise
(Updates to close)

By Pratish Narayanan

MUMBAI, May 25 (Reuters) - Indian shares rose 0.2 percent
on Monday, but Bharti Airtel (BRTI.BO) fell 5.4 percent after
the leading telecoms firm said its plan to buy 49 percent of
South Africa's MTN (MTNJ.J) would dilute earnings in the first
year.

The main index was supported by non-ferrous metals producer
Sterlite Industries (STRL.BO), which rose on higher metal
prices, and drugmaker Ranbaxy Laboratories (RANB.BO) that
jumped 21 percent after its Japanese parent Daiichi Sankyo
(4568.T) replaced the Indian firm's chairman and chief
executive.

Government-run State Bank of India (SBI.BO) and
private-sector HDFC Bank (HDBK.BO) were among the other major
laggards as investors took profits after the BSE index rose
14.1 percent last week, taking gains to more than 70 percent
since early March.

Bharti erased early gains of 8.5 percent and fell as much
as 8.25 percent before pulling back towards the close.
[ID:nLP34850]

"Investors were initially excited when the news of the deal
came out, but as the finer print surfaces the market is
disappointed," Gajendra Nagpal, chief executive of Unicon
Financial Intermediaries, said.

The 30-share BSE index .BSESN ended up 0.19 percent, or
26.07 points, at 13,913.22, with 19 stocks advancing, after
rising as much as 1 percent and falling 0.5 percent at one
stage.

The benchmark's rise last week was its most in 17 years,
after the ruling coalition won a general election decisively
during the previous weekend and raised hopes for pro-market
reforms.

"Till the new government presents its budget, there will be
expectations built up and we may not see a major correction in
the market," D.D. Sharma, vice president at Anand Rathi
Securities, said.

"Trading will be volatile, but investors will wait for the
expectations to be denied or satisfied."

Bharti fell 46.45 rupees to 811.40 rupees, after falling to
as low as 787 rupees. [ID:nSP477731]

Sterlite gained 5.9 percent to 538.10 rupees, while Ranbaxy
jumped 45.8 rupees to 266.70 rupees. [ID:nBOM425967]

Leading lender State Bank of India and private-sector rival
HDFC Bank shed 0.7 to 0.8 percent.

State-run explorer Oil & Natural Gas Corp (ONGC.BO) fell
0.6 percent to 1,039.10 rupees on a newspaper report the new
government plans to cap profits of oil producers as part of a
subsidy-sharing system for the sector.

In the broader section, gainers led advancers by almost 8
to 1 on relatively heavy volume of 878.5 million shares.

The 50-share NSE index closed flat at 4,237.55.

MAIN TOP 3 BY VOLUME

* Suzlon Energy (SUZL.BO) on 84 million shares

* Reliance Natural Resources (RENR.BO) on 33.7 million
shares

* Ispat Industries (ISPT.BO) on 27 million shares

STOCKS THAT MOVED

* Suzlon Energy fell 5.4 percent to 89.05 rupees after a
term sheet showed founders of the wind turbine maker raised
about $110 million by selling 60 million existing shares at a
steeper discount than earlier planned. [ID:nHKG184989]

* Jet Airways India (JET.BO) erased losses of as much as
4.7 percent and closed up 0.6 percent at 305.25 rupees after
the carrier posted a net profit of 529.9 million rupees for the
quarter ended March, versus a year-ago loss.

* Tourism Finance Corp (TFCI.BO) jumped 16.6 percent to
26.70 rupees after its fiscal-year 2009 net profit rose by a
third.

* Realtor Parsvnath Developers (PARV.BO) rose 10 percent to
88.85 rupees after the company said its board has approved
raising up to 25 billion rupees, including selling shares to
institutional investors.

* Housing Development & Infrastructure Ltd (HDIL.BO) fell
4.35 percent to 293.60 rupees after its Jan-March net profit
slumped 91 percent.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee trims fall as shares pare losses
[INR/]
* Indian bond yield off at 5-wk high on bargain buying
[IN/]
* Euro slips on German Ifo in thin holiday trade
[FRX/]
* Oil falls towards $61; OPEC cut unlikely [O/R]
* N.Korea nuclear test dents stocks, impact limited
[MKTS/GLOB] * Wall St slips late as budget worries linger

[.N] * For closing rates of Indian ADRs

INADR (Editing by Ranjit Gangadharan)