Indian shares volatile ahead of economic data

* Shares volatile ahead of economic survey, inflation data

* Oil firms rally after fuel price hike

* Reliance Inds, auto makers turn weak

(Updates to mid-morning)

MUMBAI, July 2 (Reuters) - Indian shares see-sawed in early
trade on Thursday as investors awaited key economic data later
in the day that could outline a roadmap for economic policy
measures.

State-run oil firms led by Oil and Natural Gas Corp
(ONGC.BO: Quote, Profile, Research) were key gainers after India unexpectedly raised
gasoline and diesel prices, while Reliance Industries (RELI.BO: Quote, Profile, Research)
was weak over uncertainty on a gas supply deal with a former
group firm.

By 10.56 a.m. (0526 GMT), the 30-share BSE index .BSESN
was up 0.04 percent to 14,651.59 points, with 20 components
weakening.

The index opened up higher but quickly slipped to negative
territory.

"Caution is visible in the market trend. There has already
been a strong run-up, and that is weighing. Nobody is willing
to hold onto large positions," said D.D. Sharma, senior vice
president at Anand Rathi Securities.

"The real direction for the market will only come after the
Budget," he said.

The annual economic survey is expected to be presented in
Parliament around noon (0630 GMT) and could be an indicator to
the policy direction to be outlined in the budget next week.

Investors expect the government to unveil pro-reform
measures in the budget such as a auction of third-generation
wireless spectrum and stake sales in state firms to raise cash.
[ID:nDEL496126]

Oil firms led the gains on hope of easing subsidy burden
incurred from selling products at discounted rates. On
Wednesday, the government raised petrol and diesel prices by as
much as 10 percent, the first increase this year.
[ID:nBOM500678]

ONGC shares were up 4.2 percent at 1,096.85 rupees, oil
marketing firm Indian Oil Corp (IOC.BO: Quote, Profile, Research) rose 3.1 percent to 558
rupees, Hindustan Petroleum Corp (HPCL.BO: Quote, Profile, Research) gained 2 percent to
317.50 rupees, while Bharat Petroleum Corp (BPCL.BO: Quote, Profile, Research) added 1.2
percent to 459 rupees.

Top aluminium producer Hindalco (HALC.BO: Quote, Profile, Research) was up 1 percent
at 84.25 rupees after lenders agreed to relax terms of a $982
million bank loan [ID:nBMB005747]. The stock had slumped on
Wednesday after it reported profits fell sharply in 2008/09.

Among key losers, Reliance Industries was down 0.4 percent
to 2,052 rupees after it said it would appeal to the Supreme
Court against a ruling to enter into a gas supply deal with
former group firm Reliance Natural Resources Ltd (RENR.BO: Quote, Profile, Research) on
unfavourable terms.

Shares of auto firms were also weak on worries over higher
fuel prices hitting demand for vehicles. Auto stocks had
rallied on Wednesday as data showed most brands posted strong
monthly sales growth.

Top car maker Maruti Suzuki MRTI.BO was down 1.4 percent
at 1,055.55 rupees, largest vehicles maker Tata Motors
<TAMO.BO slipped 0.9 percent to 296.50 rupees, while
two-wheeler maker Hero Honda (HROH.BO: Quote, Profile, Research) fell 0.8 percent to
1,387 rupees.

Weekly inflation data, also expected around noon, is also
in focus. A Reuters poll of analysts forecast the wholesale
price index to have fallen 1.35 percent in the 12 months to
June 20 [ID:nBOM514314]

In the broader market, 1,244 gainers outpaced 697 losers on
average volume of 93 million shares.

The 50-share NSE Index .NSEI was up 0.1 percent at 4,295
points.

TOP 3 STOCKS BY VOLUME

* Jagran Prakashan (JAGP.BO: Quote, Profile, Research) on 5.7 million shares

* NIIT (NIIT.BO: Quote, Profile, Research) on 5 million shares

* Satyam Computer (SATY.BO: Quote, Profile, Research) on 4.1 million shares

STOCKS ON THE MOVE

* Engineering and construction firm Punj Lloyd (PUJL.BO: Quote, Profile, Research)
rose 2.1 percent to 218.45 rupees after a unit bagged an order
worth 12.63 billion rupees ($264 million) to construct two
metro train stations in Singapore.

* McNally Bharat Engineering Co (MCNL.BO: Quote, Profile, Research) rose 5.5 percent
to 132.25 rupees after the company said it received orders
worth 468.8 million rupees.

FACTORS TO WATCH
* For technical analysis, double click on
www.reutersindia.net
* Indian rupee at 2-wk high on dlr movement, budget
eyed[INR/]
* India bond yields mixed; budget awaited
[IN/]
* FOREX-Dollar inches up, China watched, payrolls awaited

[FRX/]
* Oil steady above $69 after fall on gasoline build
[O/R]
* Asia stocks, US dlr sluggish before US jobs
[MKTS/GLOB]
* Wall St gains on recovery hopes, but job data looms
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Prashant Mehra; Editing by Lincoln Feast)