Indian shares fall 1.2 pct; Reliance, L&T drop

* Investors cautious after recent volatile sessions

* Reliance Industries down ahead of court hearing

* L&T falls on report unit is eyeing Patni stake

* Bharti, RCom rise after recent sharp fall
(Updates to mid-morning)

MUMBAI, Nov 5 (Reuters) - Indian shares slid 1.2 percent on
Thursday, tailing lower Asian peers and investor worry about
direction following sharp swings over the past two days.

Energy giant Reliance Industries (RELI.BO: Quote, Profile, Research) fell 2.1 percent
to 1,879.80 rupees, as investors awaited the hearing in its gas
dispute with Reliance Natural Resources (RENR.BO: Quote, Profile, Research) to resume
during the day.

One of the judges withdrew from the Supreme Court hearing
on Wednesday, citing potential conflict of interest.
[ID:nBOM398293] Engineering and construction firm Larsen &
Toubro (LART.BO: Quote, Profile, Research) shed 2.3 percent to 1,512 rupees, after The
Financial Express reported its outsourcing unit was in talks to
buy a majority stake in Patni Computer Systems (PTNI.BO: Quote, Profile, Research).
[ID:nBOM460442]

Patni Computer was trading 5.3 percent higher at 481
rupees.

By 11:06 a.m. (0536 GMT), the 30-share BSE index .BSESN
was trading down 1.2 percent at 15,720.01, with 22 of its
components declining.

"The recovery that we saw yesterday after a continuous
fall, is likely to be tentative," said Gajendra Nagpal, CEO of
Unicon Financial. "Though a huge downside is unlikely, some
pain still remains. Investors are cautious for now."

The benchmark index had risen 3.3 percent on Wednesday
after falling 8.4 percent over six sessions.
Traders said they were also awaiting the weekly inflation data
due by midday (0630 GMT).

The annual inflation rate is forecast to have edged up to
1.64 percent as at Oct. 24 from 1.51 percent a week earlier,
with food prices expected to have risen marginally, a Reuters
poll showed. [ID:nBOM541171]

Leading telecom companies Bharti Airtel (BRTI.BO: Quote, Profile, Research) and
Reliance Communications (RLCM.BO: Quote, Profile, Research) were up 2 percent and 2.8
percent respectively, on bargain hunting by long-term investors
after a recent sharp fall.

The stocks were also helped by an Economic Times report
that the telecom ministry would seek a fast-track approval from
the finance ministry to cut the annual licence fee paid by
large operators by up to a third. [ID:nDEL175690]

Bharti and Reliance Communications have shed more than 25
percent and 43 percent respectively since the start of October,
on disappointing September quarter results and a pricing war.

Around 73 million shares changed hands on the Bombay Stock
Exchange, while losers nearly matched the number of gainers in
the broader market.

The 50-share NSE index .NSEI was down 1 percent at
4,662.65.

STOCKS ON THE MOVE

* Maytas Infra (MAIL.BO: Quote, Profile, Research) rose by daily limit of 5 percent
to 149.45 rupees after it got a contract worth 7.9 billion
rupees from IL&FS Transportation Networks to build a part of a
four-lane highway in the western state of Maharashtra.
[ID:nBMB009020]

* Vehicle marker Eicher Motors (EICH.BO: Quote, Profile, Research) was up 1.6 percent
at 514.80 rupees, after its joint venture with Sweden's Volvo
(VOLVb.ST: Quote, Profile, Research) said Indian sales of Eicher-branded commercial
vehicles rose 71 percent in October. [ID:nDEL180774]

MAIN TOP 3 BY VOLUME

* Suzlon Energy (SUZL.BO: Quote, Profile, Research) on 9.8 million shares

* IFCI (IFCI.BO: Quote, Profile, Research) on 8.2 million shares

* Unitech (UNTE.BO: Quote, Profile, Research) on 4.9 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* India rupee report
[INR/]
* India bond report
[IN/]
* Dollar, yen gain as profits taken in euro before ECB
[FRX/]
* Oil dips under $80 after rising on U.S. crude draw
[O/R]
* Asia shares dip; dollar shaky on cautious Fed
[MKTS/GLOB]
* Wall St rally fades late after Fed; Cisco up late
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; Editing by Ranjit Gangadharan)