Indian shares ease 0.6 pct; Reliance, ICICI drop

* Fall in line with Asian markets despite U.S. Fed comments

* Analysts say liquidity still strong, no sharp drop likely

* Outsourcers buck the trend, rise on improving prospects
(Updates to early afternoon)

BANGALORE, Nov 17 (Reuters) - Indian shares shed 0.6
percent on Tuesday after Asian stocks surrendered early gains,
shrugging off the U.S. Federal Reserve's comments it was likely
to keep interest rates at very low levels for some time.

Index heavyweights ICICI Bank (ICBK.BO: Quote, Profile, Research) and Reliance
Industries (RELI.BO: Quote, Profile, Research) led the fall, as investors locked in
profits after a recent rally.

At 12:30 p.m. (0700 GMT), the main 30-share BSE index
.BSESN was trading down 0.58 percent at 16,933.88, with 23 of
its components losing ground.

ICICI dropped 1.9 percent to 901.80 rupees after the stock
had risen more than 16 percent this month.

"These kind of short-term corrections are bound to happen
in a market which has risen so much and so fast this year, and
it's healthy for the overall market," said K.K. Mital, head of
portfolio management services at Globe Capital.

The BSE index is up more than three-quarters this year,
mainly helped by foreign fund inflows of nearly $15 billion.

"Any downside should be used as buying opportunities as
liquidity flow continues to be strong," Mital said. "I don't
expect the market to drop sharply from these levels."

Reliance Industries was down 0.8 percent at 2,130 rupees.
The energy giant told shareholders at an annual meeting the
company was planning an aggressive exploration campaign over
three years. [ID:nBMA006434]
The market had opened up 0.1 percent following a Wall Street
rally after Fed Chairman Ben Bernanke reinforced expectations
that interest rates would stay low to spur growth.

Bernanke acknowledged in a speech that the dollar's slump
was raising some prices but said other factors restraining
inflation were winning the day, helping reinforce the market's
already benign view toward U.S. interest rates. [ID:nN16581813]

His remarks and better-than-expected U.S. retail sales data
fueled broad gains on Wall Street, with the Dow Jones
industrial average .DJI rising 1.3 percent and the S&P 500
.SPX climbing 1.5 percent. [.N]

Asian stocks edged lower after hitting 15-month highs, with
the MSCI's measure of regional markets other than Japan
.MSCIAPJ down 0.5 percent and Japan's Nikkei .N225 falling
0.6 percent by 0634 GMT.

Export-driven software stocks such as Infosys Technologies
(INFY.BO: Quote, Profile, Research) rose 1.9 percent to 2,394 rupees and Tata Consultancy
Services (TCS.BO: Quote, Profile, Research) was up 2.4 percent at 681.95 rupees on hopes
of a pick in outsourcing demand early next year, traders said.

In the broader market, 1,462 losers led 1,121 gainers on
volume of 169 million shares.

The 50-share NSE index .NSEI was down 0.62 percent at
5,026.70.

STOCKS ON THE MOVE

* State-run Steel Authority of India Ltd (SAIL.BO: Quote, Profile, Research) rose as
much as 1.5 percent to 186.40 rupees after its chairman said
the firm was looking at acquiring licenses for coking coal
mines abroad to protect itself from fluctuating raw material
prices. [ID:nBMA006435]

* Bharti Airtel Ltd (BRTI.BO: Quote, Profile, Research) was down 0.9 percent at
300.25 rupees. Its chief executive told Reuters the top mobile
operator expected the current state of stiff competition to
continue into 2010. [ID:nHKG208844]

MAIN TOP 3 BY VOLUME

* Mahindra Satyam (SATY.BO: Quote, Profile, Research) on 7.5 million shares

* Suzlon Energy (SUZL.BO: Quote, Profile, Research) on 7 million shares

* SpiceJet (SPJT.BO: Quote, Profile, Research) on 4 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report [INR/]
* India bond report [IN/]
* Dollar off 15-month lows but ground still rocky [FRX/]
* Oil sheds some gains; eyes dollar, data [O/R]
* Asia stocks retreat, dollar pressured [MKTS/GLOB]
* Wall St leaps as Bernanke pledges lower rates [.N]
* For closing rates of Indian ADRs INADR
(Reporting by Sumeet Chatterjee & Devidutta Tripathy; Editing
by Ranjit Gangadharan)