India shares slip more than 1 pct, output data eyed

* Shares down more than 1 pct on uncertainty ahead of data

* Banks, outsourcers lead losses

* December output data, annual inflation due at 0630 GMT

(Updates to mid-morning)

MUMBAI, Feb 12 (Reuters) - Indian shares fell more than 1 percent early on Thursday, pulled down by losses in other Asian markets and as sentiment weakened on uncertainty ahead of key economic data and an interim budget due early next week.

Index heavyweight Reliance Industries (RELI.BO), financials and outsourcers such as Tata Consultancy (TCS.BO) and Infosys Technologies (INFY.BO) all slipped as investors worried over impact of the deepening global slowdown.

"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.

"Market is not coming down because of expectations from the budget on Monday, but once the cat is out of the bag, we could see a correction."

At 11:01 a.m. (0531 GMT), the main BSE stock index .BSESN was down 1.04 percent to 9,518.45 points, after having fallen as much as 1.4 percent, with 23 components losing ground.

Investors were bearish on financial stocks ahead of industrial output data due at noon (0630 GMT), which traders said could heighten worries about rising bad debts.

Top lender State Bank of India (SBI.BO) fell 0.9 percent to 1,148.90 rupees, ICICI Bank (ICBK.BO) lost 1.8 percent at 427.40 rupees and HDFC Bank (HDBK.BO) dropped 0.5 percent to 928.60 rupees.

Export-driven outsourcers also dropped on the uncertainty over economic recovery in the United States, their key market.

Tata Consultancy Services fell 0.9 percent to 509.20 rupees, Infosys lost 2.8 percent to 1,266 rupees while Wipro (WIPR.BO) shed 0.9 percent to 219.90 rupees.

Reliance Industries (RELI.BO), India's most valuable listed firm, shed 1.4 percent to 1,364.15 rupees. It had slipped 1.3 percent on Wednesday, having risen nearly 9 percent in the previous three sessions.

Industrial output is forecast to have risen 1.3 percent in December from a year earlier, a Reuters poll showed. [ID:nBOM424401], while annual inflation is forecast to have fallen to 4.43 percent at the end of January, its lowest in just over a year. [ID:nBOM410506].

Largest-listed developer DLF (DLF.BO) rose 3.3 percent to 155.80 rupees, which traders said was on market talk the company had been able to raise bank debt recently.

In the broader market, 1,015 advancers led 658 decliners on low volume of 93 million shares.

The 50-share NSE Nifty index was down 0.7 percent at 2,905.40 points.

MAIN TOP 3 BY VOLUME

* Satyam Computer (SATY.BO) on 7.2 million shares

* Unitech (UNTE.BO) on 6.7 million shares

* Spice Communications (SPCM.BO) on 6 million shares

STOCKS ON THE MOVE

* Newspaper publishers Jagran Prakashan (JAGP.BO) and Deccan Chronicle Holdings (DCHL.BO) rose on a report the government had waived customs duty on newsprint to provide relief to the print media.

* Outsourcer Patni Computer Systems Ltd (PTNI.BO) fell 2.5 percent to 110 rupees after it reported a 36 percent fall in December quarter net income and said revenues will remain under pressure in the near term. [ID:nBMB004663].

FACTORS TO WATCH * Indian rupee slightly weaker, market waits on data [INR/] * Indian bond yields ease for 2nd day, data eyed [IN/] * FOREX-Yen gains as weaker stocks raise risk aversion [FRX/] * Asia stocks dip, risk shunned despite US stimulus [MKTS/GLOB] * Oil steadies above $36, demand worries nag; eyes US data[O/R] * Wall Street up as lawmakers near stimulus deal [.N] * For closing rates of Indian ADRs INADR

(Reporting by Prashant Mehra; Editing by John Mair)