BSE Sensex off highs as bleak outlook weighs

MUMBAI (Reuters) - The BSE Sensex faltered after a firm start on Tuesday as a weak economic outlook kept investors wary, despite a rally across much of Asia.

By 11:37 a.m., the 30-share BSE index was up 0.3 percent at 9,090.65 points, after rising as much as 1.75 percent and then briefly slipping into the negative territory.

Top bus and truck producer Tata Motors fell 4.7 percent to 135.65 rupees after it reported a 33 percent drop in January sales.

Energy major Reliance Industries, which has the highest weight in the index, rose 0.7 percent to 1,287 rupees as investors expected gas sales to help the company.

A court last week allowed Reliance to sell gas from its KG fields off India's east coast, pending judgement in a contract dispute case with another firm.

Fourteen of the index components were higher while in the broader market, losers led gainers in the ratio of 1.4:1 on low volume of 104.1 million shares.

Gajendra Nagpal, CEO of Unicon Financial, said the market drew comfort from a Asian rally at the start but there was resistance as the global economic outlook remained downbeat.

Asia's economies, which have been hit hard by the financial crisis, could recover next year, the head of the International Monetary Fund said, but warned that the export-dependent continent could not pull through on its own.

Shares in fraud-hit Satyam Computer Services shed early gains and were trading 1.65 percent lower at 56.65 rupees. India's market regulator said it would change its rules on mandatory open offers to buy shares in firms after an approach