RTRS: Indian shares give up gains; may extend losses
* BSE Sensex ends down 0.1 pct on inflation, growth woes
* Sensex declines in five of the past six sessions
* Bharti sheds 2.5 pct; had gained nearly 6 pct in 3 days
* Sun Pharma gains on U.S. FDA approval for migraine generic drug (Updates to close)
By Ami Shah
MUMBAI, June 22 (Reuters) - Indian shares erased early gains and slipped 0.1 percent on Wednesday, hurt by foreign fund outflows as rising borrowing costs and stubborn inflation chipped away investor confidence, leading to a bleak near-term outlook.
Weak European shares, ahead of a U.S. Federal Reserve policy meeting, also weighed.
Traders said investors were mostly churning their portfolios, picking up stocks that had fallen in recent sessions and booking profits in counters that had gained.
Top mobile operator Bharti led the losses with a 2.5 percent decline, erasing some of the nearly 6 percent gains seen in the past three sessions.
Hindustan Unilever , a unit of Anglo-Dutch Unilever Plc (UNc.AS), dropped 3.6 percent. However, it is still up 8.2 percent in the quarter that started in April.
The 30-share BSE index dropped 0.06 percent or 9.67 points to 17,550.63, with 16 components declining, having risen as much as 0.7 percent in early trade. It was its fifth decline in the past six sessions.
"There is a lack of interest. FIIs (foreign institutional investors) have been selling," said K.K. Mital, head of portfolio management services at Globe Capital.
FIIs have sold a net $505 million of Indian shares in seven sessions to June 20, as rising borrowing costs hurt economic growth and bite into corporate profit margins.
"There is lack of confidence. Apart from the burning inflation and growth problems, the way the political scene is tackled and the monsoon forecast are also adding to the woes."
Dealers also said that monsoon was a key factor to watch out after the weather office said on Tuesday the vital monsoon this year is expected to be just below normal, but the rains could pick up after July 15.
The benchmark has fallen 14.4 percent in the year to date, with foreign funds pulling out $453 million on slowing corporate earnings growth as rising interest rates bite spending.
State-run explorer Oil & Natural Gas Corp firmed 1.9 percent. The stock had shed 4.8 percent in the past three sessions.
Drugmaker Sun Pharmaceutical rose 1.4 percent after its unit received approval from the U.S. Food and Drug Administration to market a generic version of sumatriptan succinate injection, that is used in the treatment of migraine.
Engineering and construction firm Larsen & Toubro gained 0.7 percent, after falling more than 2 percent over the last two sessions.
The 50-share NSE index rose 0.05 percent to 5,278.30 points.
More than two shares declined for every share that advanced in the broader market, on a volume of 545 million shares on the NSE, lower than its 90-day daily average volume of 601 million shares.
The FTSEurofirst 300 index of top European shares was down 0.7 percent by 1014 GMT, while the MSCI's measure of Asian markets other than Japan climbed 0.4 percent.
STOCKS THAT MOVED
* Dr Reddys Laboratories firmed 0.2 percent to 1,514.50 rupees, after the drugmaker launched Levofloxacin tablets.
* Four Soft rose 6.5 percent to 13.85 rupees after the software services firm said it signed a deal with Mexico-based Logistics Dynamic Corp to implement freight management solution.
TOP THREE MAIN STOCKS BY VOLUME ON NSE
* Timbor Home on 43.7 million shares
* Unitech on 27.9 million shares
* GTL on 22.2 million shares
FACTORS TO WATCH * For technical analysis click on www.reuterstechnicals.net * India bond report * India rupee report * Euro gains muted, Fed meeting eyed * Brent bounces after Greek govt wins confidence vote * Euro steadies after Greek vote, Fed awaited * U.S. stock index futures dip; Fed eyed * For closing rates of Indian ADRs (Editing by Malini Menon)
OTHER MARKETS: Wall Street .... Gold ....... Currency. Eurostocks..... Oil ........ JP bonds.. ADR Report ..... LME metals. US bonds.. Stocks News US.. Stocks News Europe
DIARIES & DATA: Indian Data Watch Asia earnings diary U.S. earnings diary European diary Indian diary Wall Street Week Ahead Eurostocks Week Ahead
TOP NEWS: For top Asian company news, double click on: U.S. company news European company news Forex news Global Economy news Technology news Telecoms news Media news Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: topnews.session.rservices.com
