Indian shares rise 1.8 pct, but snap 14-week rally

* Fall 4.7 pct on week after 90 pct rally from early March

* Long-term investors see opportunity at dips

* Reliance Ind, L&T, Infosys gain on Friday

* Trading to be choppy ahead of budget on July 6
(Updates to close)

By Pratish Narayanan

MUMBAI, June 19 (Reuters) - India's main stock index
bounced 1.8 percent in choppy trade on Friday, but the
rear-guard rise was not sufficient to extend a run of 14 weekly
gains as investors grabbed profits after a three-month rally.

Renewed jitters about the global economy and worries about
expensive valuations after a 90 percent jump since early March
eclipsed the market this week. Still, long-term investors were
buyers as prices dropped.

"The market can't keep going up in a straight line all the
time. This kind of fall was bound to happen," V.P. Chaturvedi,
who helps manage $5 billion at Tata Asset Management, said.

The main index dropped 4.7 percent on the week, after
rallying 83 percent over 14 consecutive weeks in its best run
in four years.

"It gives the opportunity for new investors to come in.
There is still a lot of interest in the market," Chaturvedi
said.

Energy giant Reliance Industries (RELI.BO) pulled back
after falling in the previous four sessions following an
unfavourable court ruling on gas supplies. [ID:nBOM433343]

The stock ended the week down 13.5 percent, leading losses
in the main index.

Outsourcer Infosys Technolgies (INFY.BO) gained 2.9 percent
and engineering and construction firm Larsen & Toubro
(LART.BO), which fell 13.4 percent from last Wednesday through
the previous session, rose 5.7 percent on Friday.

Reliance Infrastructure (RLIN.BO) added 5.1 percent after
the Economic Times newspaper said its consortium with Hyundai
Engineering was tipped to bag a contract worth about 15 billion
rupees ($310.7 million) to construct the second leg of a
highway project connecting Mumbai's suburbs to the city.

The Business Standard reported Reliance Infrastructure had
also started negotiating with domestic banks to tie up funds
for the second phase of Mumbai's metro rail project, though it
was yet to win the contract. The stock ended the week up 7.1
percent.

The order books of the company and firms such as Larsen &
Toubro are expected to get a boost as the government steps up
spending to revamp the country's ramshackle infrastructure.

The 30-share BSE index .BSESN ended up 256.36 points at
14,521.89, with 24 stocks advancing. It had leapt 94 percent
from a 2009 low in early March to its highest level in almost a
year last Friday.

Most of the gains can be attributed to foreign funds, which
pumped almost $8 billion into the market since mid-March on
signs of an economic rebound.

A stronger mandate for the ruling coalition at the end of
elections last month has raised hopes the government, free from
its former communist allies, will pursue reforms such as
privatisations and relaxation of foreign investment rules.

Investors are, however, awaiting the budget on July 6 for a
clearer picture of the government's plans to push up economic
growth and tackle a yawning fiscal deficit.

Trading could be choppy next week as investors will look to
take profits if prices move up, analysts said.

"The extreme short-term indicators signal the market is in
oversold territory. But the longer-term indicators signal more
of a correction may be coming up," Alex Mathew, head of
research at Geojit BNP-Paribas Financial Services, said from
Kollam in the southern state of Kerala.

"Today may turn out to be just a temporary pull-back, and
the market could consolidate further before the budget."

Reliance Industries, which has the most weight in the main
index, rose 0.7 percent to 2,039.60 rupees, while No. 2
outsourcer Infosys gained 49.65 rupees to 1,771.10 rupees.

Larsen climbed 80.8 rupees to 1,496.10 rupees, and Reliance
Infrastructure advanced 61 rupees to 1,262.25 rupees.

Leading listed realty firm DLF Ltd (DLF.BO), which had more
than tripled from March 6 through early June, shed more than 10
percent this week.

Non-ferrous metals producer Sterlite Industries (STRL.BO)
was another major loser, falling 15.5 percent on the week as
copper prices weakened.

In the broader section on Friday, gainers led losers 1,351
to 1,305 on relatively heavy volume of 503.9 million shares.
The 50-share NSE index rose 1.5 percent to 4,313.60.

MAIN TOP 3 BY VOLUME

* Unitech (UNTE.BO) on 28.7 million shares

* Suzlon Energy (SUZL.BO) on 24.2 million shares

* Reliance Natural Resources (RENR.BO) on 20.6 million
shares

STOCKS THAT MOVED

* Opto Circuits (India) Ltd (OPTO.BO) jumped 7.6 percent to
161.70 rupees after the maker of stents and other medical
devices reported a 62 percent surge in quarterly net profit.

* Tata Steel (TISC.BO) gained 5.9 percent to 411.75 rupees
after the company said it raised prices for hot-rolled and
cold-rolled coils by up to 2 percent across some regions in the
country.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee weakens as shares turn negative
[INR/]
* Indian bond yields steady; auction result eyed
[IN/]
* Yen falls broadly; dlr moves limited before Fed
[FRX/]
* Oil rises near $72 on economic prospects, Nigeria [O/R]
* Stocks climb, dlr dips; confidence lifted [MKTS/GLOB]
* U.S. stock futures signal gains; eyes on RIM

[.N] * For closing rates of Indian ADRs

INADR (Editing by Ranjit Gangadharan)