Indian shares seesaw, await inflation; Ranbaxy up

(Updates to late morning)

MUMBAI, June 13 (Reuters) - Indian shares swung between
losses and gains on Friday ahead of inflation data, but drug
maker Ranbaxy Laboratories (RANB.BO) rose more than 4 percent
on a newspaper report Pfizer Inc (PFE.N) may launch a bid.

Traders said investors were worried about rising interest
rates, which could hurt consumer spending and slow down
earnings growth for companies.

There was also market talk that weekly inflation could come
in higher than expected. A Reuters poll on Thursday had
forecast the annual inflation rate at end-May at 8.28 percent,
its highest in 3-¾ years. The data is due at noon (0630 GMT).

"It is clear that the rising headline inflation rates
should not be ignored," DBS said in a research note. "At some
point, the economy would have to factor in rising oil prices
and raise rates."

At 11:30 a.m. (0550 GMT), the benchmark BSE 30-share index
.BSESN was down 0.31 percent, or 47.09 points at 15,203.11
with 22 components in the red, after rising as much as 0.6
percent in early trade.

Shares in Ranbaxy were up 3.1 percent at 560.50 rupees,
after rising as high as 566, after the Business Standard
newspaper reported that Pfizer may make a bid, countering a
$4.6 billion offer by Japan's Daiichi Sankyo (4568.T) for the
Indian drug maker. See: [ID:BOM142743]

Top lender State Bank of India (SBI.BO) was up 1 percent
at
1,353.15 rupees, after flipping between negative and positive
territory ahead of its review of interest rates.

The government-run bank's chairman had said it would review
its rates on Friday after the central bank raised its key
lending rate by a quarter point to 8 percent on Wednesday to
contain inflation expectations.

A Reuters poll of economists on Thursday forecast the
central bank may again raise rates in 2008. [ID:nBOM94299]

Top mobile operator Bharti Airtel Ltd (BRTI.BO) fell 1.2
percent to 809.95 rupees, mostly on selling by foreign funds,
traders said.

In the broader market, gainers led losers 1,240 to 880 on
volume of 98 million shares.

The 50-share NSE index was down 0.71 percent at
4,506.90.

Elsewhere in the region, Karachi's 100-Share index
dropped 0.5 percent to 12,958.89, while Colombo's All-Share
index .CSE was up 0.08 at 2,461.88.

STOCKS ON THE MOVE

* State-run lender IFCI Ltd (IFCI.BO) fell 2.7 percent to
57.70 rupees after it said it would initiate legal process to
pare Life Insurance Corp's stake to 8.39 percent from 11.35
percent now, but did not make any announcement relating to
induction of a strategic investor.

* Lok Housing & Constructions Ltd (LOKH.BO) rose 5.11
percent to 106 rupees ahead of a board meeting to consider
fund-raising options from both foreign and local markets,
including an institutional placement.

MAIN TOP 3 BY VOLUME

* Chambal Fertilisers & Chemicals Ltd (CHMB.BO) on 6.2
million shares.

* Shriram City Union (SHCU.BO) on 5.4 million shares.

* Reliance Natural Resources Ltd (RENR.BO) on 5.24 million
shares.

FACTORS TO WATCH
* Indian rupee eases on high oil, price data awaited
[INR/]
* Indian bond yields up as inflation seen higher
[IN/]
* FOREX-Dollar edges down ahead of G8 and inflation data
[FRX/]
* Oil dips as dollar gains counter Nigeria supply fears
[O/R]
* GLOBAL MARKETS-Asia stocks, bonds hurt as inflation haunts
[MKTS/GLOB]
* US STOCKS-Market rises on retail sales, BUD deal [.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Hiral Vora ; Editing by Ranjit Gangadharan)