Indian shares down slightly; Techs, Reliance weak

Indian shares were trading 0.1 percent lower on Friday, as fears of rupee ppreciation pulled down outsourcers and energy giant Reliance Industries (RELI.BO: Quote, Profile, Research) slid after report it has sweetened its offer to buy a controlling stake in LyondellBasell.
Export focussed software companies edged lower, on expectations the rupee may strengthen further this year, on the back of high foreign inflows. Infosys Technologies (INFY.BO: Quote, Profile, Research) was down 1.4 percent while Tata Consultancy (TCS.BO: Quote, Profile, Research) and Wipro (WIPR.BO: Quote, Profile, Research) dropped 1.1 percent each. According to a Reuters poll, the Indian unit is seen picking up where it left off in 2009, rising another 4 percent on top of its 4.7 percent increase last year, its appreciation driven mainly by inbound portfolio investment.

"Rupee appreciation is clearly hitting IT stocks. This is a big negative for the pack," said Ambareesh Baliga, vice-president of Karvy Stock Broking. By 09:56 a.m. (0426 GMT), the 30-share BSE Index .BSESN was trading down 0.07 percent at 17,603.14, with 17 of its
components declining.

"Valuations are looking expensive, and we have reached dangerous levels. It is liquidity more than fundamentals, that is driving the market," said Baliga. "Investors should start exiting and book profits." Energy major Reliance Industries was down 0.2 percent at 1,103 rupees.

Reliance's has recently made a new offer has pushed its valuation of Lyondell to about $13.5 billion, up from $12 billion in an initial bid made in November, the Wall Street Journal reported, citing people familiar with the matter. Metals stocks dipped in line with a decline in base metal prices, which were hit by fear of tighter Chinese monetary policy.

Sterlite Industries (STRL.BO: Quote, Profile, Research) dropped 1.3 percent while Hindalco (HALC.BO: Quote, Profile, Research) and Tata Steel (TISC.BO: Quote, Profile, Research) declined 0.5 percent and 1 percent respectively. In the broader market, gainers led losers in a ratio of 2.5:1 in a volume of 130 million shares.

The 50-share NSE index .NSEI was down 0.1 percent at 5,289.85. STOCKS ON THE MOVE

* State-run oil marketing companies such as Bharat Petroleum (BPCL.BO: Quote, Profile, Research), Indian Oil Corp (IOC.BO: Quote, Profile, Research) and Hindutan Petroleum (HPCL.BO: Quote, Profile, Research) were up 0.7-1.2 percent, as oil prices edged lower. These companies are forced to sell fuel products at mandated discounts.

* Power gear maker BGR Energy (BGRE.BO: Quote, Profile, Research) rose 3.8 percent to
539.50 rupees, after it said it has entered in a technology collaboration pact with a U.S. firm for making and selling heat recovery steam generators.