Indian shares to fall as credit fears weigh

NEW DELHI, July 8 (Reuters) - Indian shares are set to
start lower on Tuesday after fragile credit markets rattled
Asian and U.S. stocks, adding gloom to domestic inflation and
expectations for further monetary tightening.
Shares in No. 2 mobile operator Reliance Communications
(RLCM.BO: Quote, Profile, Research) will be watched as its exclusivity talks deadline for
a tie up with South Africa's MTN (MTNJ.J: Quote, Profile, Research) ends on Tuesday.
Reliance Communications stock fell more than 4 percent on
Monday.

A deal looks unlikely as a dispute with Reliance Industries
(RELI.BO: Quote, Profile, Research) is yet to be resolved, but analysts and media reports
have said the deadline could be extended. See: [ID:nBOM343381]

"I think the market will open weak based on what we saw
yesterday and what we are seeing today in the international
markets," said Ambareesh Baliga, vice president at Karvy Stock
Broking.

The 30-share BSE index ended up 0.5 percent at
13,525.99 on Monday after paring most of the 2.5 percent rise
during trade.

Asian stocks fell on Tuesday, weighed by the financial
sector after sharp declines in shares of top U.S. mortgage
firms Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) on funding
concerns reminded investors about the fragility of global
credit markets.

By 0316 GMT, Japan's Nikkei .N225 was down 1.8 percent,
while MSCI's measure of other Asia Pacific stocks .MSCIAPJ
was trading 1.2 percent lower.

U.S. stocks fell on Monday on concerns the top two mortgage
providers would have to raise more capital, severely devaluing
existing shareholders' stakes.
-----------------MARKET SNAPSHOT AT 0316
GMT-------------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1252.31 -0.84% -10.590
USD/JPY <JPY=> 107.12 -0.05% -0.050
10-YR US TSY YLD <US10YT=RR> 3.9111 -- 0.002
SPOT GOLD <XAU=> 926.35 0.10% 0.900
US CRUDE CLc1 142.01 0.45% 0.640
DOW JONES .DJI 11231.96 -0.50% -56.58
ASIA ADRS .BKAS 145.85 0.26% 0.38
-------------------------------------------------------------

STOCKS TO WATCH

* Energy explorer Cairn India Ltd (CAIL.BO: Quote, Profile, Research), after it said
it would invest $100 million for the first phase of oil
exploration in Sri Lanka's north-western Mannar oil basin.
[ID:nCOL173540]

* New Delhi Television Ltd (NDTV.BO: Quote, Profile, Research), after its founders
increased their holding in the media firm to 71.38 percent.

* Automobiles castings maker Hinduja Foundries Ltd
(HNDF.BO: Quote, Profile, Research), after it said it would raise up to 2.5 billion
rupees in debt and equity.

* Shipbuilding firm Bharati Shipyard Ltd (BHAR.BO: Quote, Profile, Research), after
it said it expected revenue in 2008/09 to grow at 40 percent on
the back of heavy orders and new facilities. [ID:nBOM174001]

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee seen lower on easy Asian stocks
[INR/]
* Indian bond yields to rise on cash squeeze
[IN/]
* FOREX-Dollar eases as credit worries weigh, oil eyed
[FRX/]
* Oil rebounds toward $142, buoyed by easing dollar [O/
R]
* GLOBAL MARKETS-Asia stocks sag as credit fears hurt banks
[MKTS/GLOB]
* US STOCKS-Financial worries weigh on Wall Street
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Devidutta Triparthy and Aniruddha Basu; Editing
by Editing by Ranjit Gangadharan)