Indian shares snap 3-day winning streak; Hindustan Unilever hit

* BSE ends 0.6 pct lower; NSE down 0.56 pct
* Hindustan Unilever shares fall on higher royalties
* India finmin seeks to reassure foreign investors on
reforms, rating

By Manoj Dharra
MUMBAI, Jan 22 (Reuters) - Indian shares snapped a three-day
winning streak on Tuesday, retreating from two-year highs, as
Hindustan Unilever slumped after posting disappointing volumes
growth, while Cairn India Ltd was hit by worries about a slower
production ramp-up in a key block.
HUL results were in contrast with a series of upbeat reports
from blue chips such as Infosys Ltd, which had sparked
a round of profit-taking in shares.
Earnings results from HUL and Cairn offset the impact of
Indian Finance Minister P. Chidambaram's comment during meetings
with foreign investors in Hong Kong that the government remained
committed to pro-growth policies and reforms.
Results of blue chips such as Larsen & Toubro on
Thursday and Maruti Suzuki on Friday will set the
trend for markets, while the Reserve Bank of India's policy
review on Jan. 29, when the central bank is widely expected to
cut interest rates by 25 basis points, will be key next week.
"It was mostly profit booking and disappointment on HUL
numbers which led to the fall in the market," said G.
Chokkalingam, executive director and chief investment officer at
Centrum Wealth Management.
"The uptrend remains intact, as earnings season would remain
robust," Chokkalingam added.
The benchmark BSE index ended 0.6 percent, or
120.25 points, to end at 19,981.57, after hitting its highest
since January 2011 on Monday.
The broader NSE index fell 0.56 percent, or 33.80
points, to end at 6,048.50, a day after hitting its highest
since January 6, 2011.
Hindustan Unilever Ltd, the Indian unit of
Anglo-Dutch firm Unilever Plc , fell 3.3
percent.
India's largest consumer goods maker fell despite posting a
16 percent jump in third-quarter net profit, hurt by low volume
growth and a rise in royalty payments.
Cairn India Ltd shares fell 2.3 percent after a
Kotak report said its management indicated a slower ramp-up in
production from its Rajasthan block.
Ashok Leyland fell 2.85 percent after Jefferies
downgraded India's second-biggest bus and truck maker to
"underperform" from "buy", citing slower demand for trucks from
Southern India.
Kotak Mahindra Bank rose 1.55 percent after its
December quarter earnings rose 24.6 percent to 5.77 billion
rupees from a year earlier.
Pantaloon Retail Ltd gained 9.7 percent after RBI
eased restrictions on the purchase of shares in the company by
foreign institutional investors as well as non-resident Indians
and persons of Indian origin.
FACTORS TO WATCH

* Euro rises, Bunds fall after German ZEW survey
* Oil rises to $112, Japan plans more stimulus
* Shares hit 20-month high;Japan promises open-ended easing

* Foreign institutional investor flows
* For closing rates of Indian ADRs

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 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 Asia Macro data <ECONASIA

(Additional reporting by Abhishek Vishnoi; Editing by Jijo
Jacob)