Indian shares fall 1 pct; Infosys rises on UK buy

* U.S. financial woes unnerve investors

* Infosys up after acquisition of UK's Axon Group

* Weaker rupee helps export-led techs
(Updates to mid-morning)

MUMBAI, Aug 26 (Reuters) - Indian shares fell as much as
1.1 percent on Tuesday as investor confidence was roiled by
U.S. financial sector woes and the frail state of the global
economy, but software bellwether Infosys rose after a big
acquisition.

Infosys Technologies (INFY.BO), India's No. 2 software
services firm, said late on Monday it would buy British
consultancy Axon Group Plc AXO.L for 407 million pounds ($753
million). [ID:nBOM170568]

Its shares were up 1.1 percent at 1,721 rupees, after
starting lower.

Other export-led technology shares also rose as the rupee
fell to 17-month lows beyond 44 per dollar, weighed down by
wobbly shares and greater demand for the U.S. unit from oil
importers.

Leading outsourcer Tata Consultancy Services (TCS.BO) rose
0.9 percent to 825.50 rupees and No. 4 Satyam Computer Services
(SATY.BO) climbed 1.96 percent to 401.05 rupees.

But top listed firm Reliance Industries (RELI.BO), which
enjoys the maximum weightage in the main index, led the market
lower slipping 2.6 percent to 2,172 rupees on foreign fund
selling, traders said.

Financial stocks fell after another U.S. bank got into
trouble, rekindling fears the global credit crisis could
worsen. Although Indian banks are not exposed to the U.S.
crisis, they are impacted by weak global sentiment.

"We are in tune with the global cues, but the fall is lower
which is a comforting factor. The market believes the measures
to control inflation are playing out," Gajendra Nagpal, chief
executive at Unicon Financial Intermediaries said.

By 11:21 a.m. (0551 GMT), the 30-share BSE index .BSESN
was down 0.71 percent, or 102.44 points, at 14,348.59, with 20
components falling. It fell as low as 14,286.38 in early trade
and is down more than 29 percent this year.

No. 2 lender ICICI Bank (ICBK.BO) slipped 1.7 percent to
645.05 rupees and top mortgage lender Housing Development
Finance Corp (HDFC.BO) fell 1.5 percent to 2,328.20 rupees.

"In absence of domestic triggers, it is highly probable
that we may even see a very choppy stock specific action for
today's trade. Nervousness is likely to creep in again,"
Reliance Money said in a note to clients.

Asian stocks fell more than 1 percent after trouble in the
U.S. financial sector, including a ninth bank failure,
increased the unease in Asia about the potential ripple
effects.

In the broader market, 1,318 losers led 774 gainers on
volume of 74.3 million shares.

The 50-share NSE index fell 0.8 percent to
4,300.80.

Elsewhere in the region, Karachi's 100-share index
fell 3.99 percent to 9,421.98, but Colombo's All-share index
.CSE edged up 0.3 percent to 2,416.30.

STOCKS ON THE MOVE

* Bosch Ltd (BOSH.BO) rose 13.7 percent to 4,150 rupees
after the auto parts maker said its board would consider a
share buyback on Sept. 2.

* Kitchen appliances maker TTK Prestige Ltd (TTKL.BO) rose
13.6 percent to 150.05 rupees after it said its board would
meet on Sept. 1 to consider delisting from the stock exchanges.

MAIN TOP 3 BY VOLUME

* Pennar Industries (PENN.BO) on 16.5 million shares

* Reliance Natural Resources (RENR.BO) on 2.9 million
shares

* Sejal Architectural Glass (SEJA.BO) on 1.7 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee falls to 17-mth low, cbank watched
[INR/]
* Indian bond yields rise ahead of supplies
[IN/]
* FOREX-Dlr gets boost from credit jitters, Ifo awaited
[FRX/]
* Oil firm above $115 on tropical storm, Russia tension
[O/R]
* GLOBAL MARKETS-Asia stocks fall as financial crisis rolls on
[MKTS/GLOB]
* US STOCKS-Financial worries drive Wall St down 2 pct
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Narayanan Somasundaram; Editing by Ranjit
Gangadharan)