India shares fall 1.6 pct on slowdown worries

* Shares down 1.6 pct on slowdown worries

* Reliance Ind, Bharti, outsourcers lead losses (Updates to close)

By Prashant Mehra

MUMBAI, Feb 12 (Reuters) - Indian shares fell 1.59 percent on Thursday after data showing an unexpected fall in industrial output added to economic worries, although hopes of fresh stimulus measures in next week's budget slowed the losses.

Falling stocks included index heavyweight Reliance Industries (RELI.BO), mobile leader Bharti Airtel (BRTI.BO), financials and outsourcers such as Tata Consultancy (TCS.BO) and Infosys Technologies (INFY.BO).

"The overhang of global markets is still there. So far, the market seems to be holding, driven by some amount of expectation for stimulus measures, but we don't know what form and size," said Jayesh Shroff, fund manager at SBI Mutual Fund.

The 30-share BSE stock index .BSESN lost 152.71 points to 9,465.83 points, its lowest close since Feb. 6, with 22 components ending lower.

In the broader market, 1,316 advancers led 1,090 decliners on above-average volume of 348 million shares.

"The long-term investors are not getting in the market at this time of uncertainty. The volumes are only on trading calls on frontline stocks," said R. K. Gupta, managing director at Taurus Asset Management.

India's industrial output fell 2.0 percent in December from a year earlier, below a forecast for an annual rise of 1.3 percent in a Reuters poll of economists. [ID:nDEL424150].

Ahead of national elections due by mid-May, the government will release an interim budget on Monday which is expected to provide tax breaks and other incentives to bolster slowing growth.

Tata Consultancy Services fell 0.9 percent to 509.20 rupees and Infosys lost 3.4 percent to 1,258.35 rupees on uncertainty about the economic outlook in the United States, their key market, but Wipro (WIPR.BO) closed marginally higher at 222.30 rupees.

Bharti Airtel fell 3.5 percent to 650.45 rupees, despite its chief executive saying its focus on rural areas would drive growth and help sustain subscriber additions.[ID:nDEL002563]

Reliance Industries, India's most valuable listed company, shed 2.3 percent to 1,351.70 rupees as investors locked in profits, traders said. The stock had slipped 1.3 percent on Wednesday, but is still up more than a quarter from a Jan. 13 low of 1,067.10 rupees.

Financial stocks were weighed down by worries that bad debts would rise in a weakening economy. ICICI Bank (ICBK.BO) lost 3.2 percent to 421.30 rupees and HDFC Bank (HDBK.BO) dropped 0.2 percent to 931.75 rupees.

Largest-listed developer DLF (DLF.BO) rose 3.6 percent to 156.25 rupees on market talk the company had successfully raised bank debt recently.