India shares set for cautious start after a tumble

MUMBAI, June 18 (Reuters) - Indian shares are poised for a
cautious start on Thursday as some long-term investors enter
the market a day after it fell 2.9 percent to its lowest close
in three weeks.

Trading is expected to be choppy as rising valuations will
prompt some profit-taking on an 80 percent rally since early
March.

Although the market is vulnerable to bouts of
profit-taking, expectations the government will unveil reform
plans in its annual budget on July 6 would provide support,
traders said.

Top mortgage lender Housing Development Finance Corp
(HDFC.BO) and HDFC Bank (HDBK.BO) will be watched after the
Economic Times newspaper said they are set to reduce interest
rates on term deposits by up to 25 basis points.

Energy giant Reliance Industries (RELI.BO) is in focus
after the Business Standard newspaper said the petroleum
ministry directed the firm to make additional allocation of
natural gas from its KG basin find to nine power companies from
the surplus due to no or low off-take by fertiliser units.

The company's stock has fallen for the past three sessions
following an unfavourable court ruling on gas supplies.
[ID:nBOM433343]

Investors will also await data on the wholesale price
index. India's wholesale price index (WPI) is forecast to have
fallen in the year to June 6 for the first time in at least
three decades, heralding a period of annual deflation that
analysts said could last up to four months. [ID:nBOM57126]

Other Asian markets were lower on Thursday, with Japan's
Nikkei .N225 down 1.7 percent by 0341 GMT, while MSCI's
measure of other Asian markets .MSCIAPJ fell 0.6 percent.

Nifty futures traded in Singapore SINc1 were flat,
pointing to a cautious opening in India.

On Wednesday, the benchmark 30-share BSE index .BSESN
ended down 2.91 percent, or 435.07 points, at 14,522.84, its
lowest close since May 22.
--------------------MARKET SNAPSHOT AT 0345 GMT--------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 910.71 -0.14% -1.260
USD/JPY JPY= 95.74 0.08% 0.080
10-YR US TSY YLD US10YT=RR 3.6804 -- -0.006
SPOT GOLD XAU= 938.9 0.05% 0.500
US CRUDE CLc1 71.04 0.01% 0.010
DOW JONES .DJI 8497.18 -0.09% -7.49
ASIA ADRS .BKAS 107.98 0.23% 0.25
-------------------------------------------------------------

STOCKS TO WATCH

* Wockhardt Ltd (WCKH.BO), after the Indian drug firm said
it has sold its German business Esparma to a unit of Germany's
Lindopharm Gmbh, as part of a restructuring process.
[ID:BOM216309]

* Havells India Ltd (HVEL.BO), after the diversified
electrical products maker said it will spend 750 million rupees
in FY10 to expand its switchgear facility. [ID:BOM171783]

* Trent Ltd (TREN.BO) after the Tata group-run retail chain
posted a 19 percent fall in net profit to 267.5 million rupees
in FY09.

FACTORS TO WATCH
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Dollar falls vs euro, as Fed hike view undermined
[FRX/]
* Oil pauses above $71 as dollar holds steady
[O/R]
* Oil rebounds after supply drop, dollar slips
[MKTS/GLOB]
* Nasdaq advances with tech, but banks curb Dow, S&P
[.N]
* For closing rates of Indian ADRs INADR
(Reporting by Pratish Narayanan and Jasudha Kirpalani; Editing
by Dhara Ranasinghe)