Indian shares fall 0.2 pct on rate concerns; SBI down 3 pct

* State-run banks fall after rating cut by Morgan Stanley

* Analyst say rate hikes could put pressure on banks' margins

* Infosys rises more than 1 pct after management reshuffle

* Maruti Suzuki drops on worries about slowing sales growth (Updates to noon)

MUMBAI, May 2 (Reuters) - Indian shares fell 0.2 percent on Monday as investors turned cautious on expectations the central bank may adopt a hawkish stance at its policy on Tuesday, with top lender State Bank of India leading the losses.

The Reserve Bank of India is seen raising rates by a quarter percentage point at the policy and analysts now expect it to raise rates by a total of 75 basis points for the rest of 2011, the latest Reuters poll found. [ID:nL3E7FQ0YW]

State Bank of India fell as much as 3.2 percent to 2,715.80 rupees after Morgan Stanley downgraded it and some other state-run banks, citing pressure on the lenders' net interest margins.

Shares in state-run lenders Canara Bank and Punjab National Bank dropped 4.5 percent and 3.3 percent, respectively. [ID:nBMA009735]

But Infosys Technologies' shares rose as much as 1.3 percent to 2,944 rupees after the country's second-largest software services exporter reshuffled its management amid growth concerns on Saturday. [ID:nL3E7FU06R]

Goldman Sachs said in a research note that the uncertainty surrounding the management restructuring at Infosys was over, with the management now increasing its focus on executing the new strategy.

Goldman, which has a "buy" rating on the stock, said Infosys was best positioned for growth among it domestic peers.

Separately, Infosys chief executive said the firm was on the hunt for acquisitions in Europe and Japan in areas including healthcare and public services, and companies with annual revenues of up to $600 million could be targets. [ID:nSGE741004]

"There was uncertainty in the minds of the investors and we have got some direction now. In the short term, the uncertainties are out. This is a positive," said Rohit Anand, analyst with PINC Research, referring to the management reshuffle.

"By making these changes, operations will not be affected and they can think of long-term goals."

At 12:07 a.m. (0637 GMT), the 30-share BSE index was down 0.2 percent at 19,097.16, with 16 of its components declining. The market index had opened up 0.5 percent and then fell as much as 0.5 percent.

The 50-share NSE index was trading down 0.35 percent at 5,729.50.

" There is some nervousness in the markets ahead of the rate decision. People are getting worried about the net interest rates and asset quality of the banks if the interest rates keep rising," said Neeraj Dewan, director of Quantum Securities.

India's manufacturing sector maintained its strong rate of expansion in April, helped by higher output and employment, a survey showed on Monday, reinforcing expectations for more interest rate increases. [ID:nBMA009736]

Shares in Maruti Suzuki were down 2.2 percent at 1,288.50 rupees, after the company posted its slowest pace of monthly sales growth in more than a year as rising interest rates dampened consumer demand.

Automobile sales growth in India is expected to fall by more than half this fiscal year to 12-15 percent from the peaks a year earlier, according to the Society of Indian Automobile Manufacturers (SIAM).

Auto sales grew a record 30 percent in 2010-2011 to 1.98 million units.

In the broader market, losers outpaced gainers in the ratio of 1.7 :1 , with 154 million shares traded on the NSE.

Asian stocks rose on Monday and U.S. stock index futures extended gains on the back of news Osama bin Laden was dead. The MSCI's measure of Asian markets other than Japan was up 0.3 percent at 0523.

STOCKS ON THE MOVE

* Nucleus Software Exports was trading down 1.9 percent at 91.85 rupees after the software services provider reported a 52 percent drop in its March quarter net profit on Monday. [ID:nMBI000980]

* Ajanta Pharmaceuticals was up 4.5 percent at 262.25 rupees after the the Economic Times reported that Dabur India was in talks to buy the '30-Plus' multi-vitamin supplement brand from Ajanta. [ID:nL3E7G206B]

MAIN TOP THREE BY VOLUME ON NSE

* Alok Industries on 13.6 million shares

* Unitech on 12.2 million shares

* UCO Bank on 6.7 million shares

FACTORS TO WATCH * For technical analysis see: www.reuterstechnicals.com * Indian rupee report * Indian bonds report * Dollar rises from 3-yr low after US kills Osama Bin Laden

* Oil falls by 1 percent on news Bin Laden dead * Dollar rises, oil slides after news bin Laden killed

* Dow posts best month in 2011 but Microsoft drags * For closing rates of Indian ADRs (Reporting by Sumeet Chatterjee; additional reporting by Bharghavi Nagaraju; Editing by Aradhana Aravindan) (If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)

ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea.. S.E. Asia....... Hong Kong... Taiwan... Australia/NZ.... India....... China....

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 [ID:nINDATA] 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

LIVE PRICES & DATA: World Stocks <0#.INDEX> Currency rates Dow Jones/NASDAQ Nikkei FTSE 100 Debt <0#USBMK=> Indian rupee LME price overview (Reporting by Sumeet Chatterjee; additional reporting by Bharghavi Nagaraju)