* BSE index falls 0.50 pct; NSE index down 0.39 pct
* NSE hits another record high this session
* Metal stocks fall on China concerns (Adds real-estate shares)
By Indulal PM
MUMBAI, March 11 (Reuters) - India's broader NSE index fell on Tuesday, retreating from a record high hit earlier in the session, as recent outperformers such as Reliance Industries fell on profit-booking ahead of key inflation data.
India's record-setting rally, with the NSE hitting its third all-time high in as many sessions, faces a key test on Wednesday when India is due to release consumer inflation and industrial output data, the last set of reports before the Reserve Bank of India's policy review on April 1.
Although foreign institutional investors on Monday bought a net $211.6 million shares in secondary markets, heavy selling in primary markets turned them into net sellers of $612 million for the day, halting a 16-day consecutive buying streak.
Still, for the year, overseas funds have bought a net $1.5 billion, which analysts have attributed largely to bets on a recovery in the domestic economy, easing inflation, and the prospect of a win by the opposition Bharatiya Janata Party, which is considered more business-friendly by markets.
"Markets will be watching the data," said Jagannadham Thunuguntla, chief strategist at SMC Global Securities.
"But people are building up positions and focusing their portfolios on the next big event, which is elections. There could be some correction, but the undercurrent is positive."
The NSE fell 0.39 percent to end at 6,511.90 points, retreating from a record high of 6,562.85 points hit earlier in the day.
The fall snapped a five-day winning streak in which the NSE index had surged 5.1 percent.
The BSE index fell 0.49 percent to end at 21,826.42, also snapping a five-session winning run, although the benchmark did not set a record high on Tuesday.
Recent top gainers were among the biggest decliners. Reliance Industries Ltd fell 1.2 percent after surging 9.7 percent over the previous three sessions, while HDFC Bank Ltd lost 1.3 percent after jumping 9.8 percent over the same period.
Metal stocks extended falls to a second day on rising fears of a slowdown in China. Tata Steel fell 5.6 percent, after losing 1.9 percent on Monday. Hindalco Industries fell 3.7 percent.
Meanwhile, Sesa Sterlite ended 3.34 percent lower adding to its 1.2 percent fall in the previous session, as iron ore prices posted their biggest one-day drop in over four years on Monday.
But among the gainers, power stocks surged after Delhi's electricity regulator laid out a plan to pay the utilities for some of the money owed to them by consumers in the Indian capital.
Tata Power gained 3.85 percent while Reliance Infrastructure closed 4.8 percent higher.
Real-estate stocks saw some buying interest with the BSE realty index gaining 2.24 percent on hopes that easing inflation would keep interest rates steady.
Top developer DLF rose nearly 4 percent, Unitech gained 1.2 percent and Sobha Developers ended 4.51 percent higher.
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FACTORS TO WATCH * Yen firms as Bank of Japan leaves policy stance unchanged * Oil rises, spurred by fresh Ukraine tensions * World stocks, oil steady but eyes still on Ukraine, China * Foreign institutional investor flows * For closing rates of Indian ADRs
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Politics/General Asia Macro data <ECONASIA (Editing by Sunil Nair)