(Corrects to add dropped word 'in' before China in paragraph 1)
* BSE index falls 1.19 pct; NSE index down 1.17 pct
* Indexes mark the biggest single-day fall in 7-1/2 weeks
* Recent outperformers fall on profit-taking
By Indulal PM
MUMBAI, Dec 8 (Reuters) - Indian shares posted their biggest falls in 7-1/2 weeks on Monday, as IT services exporter Infosys Ltd slumped after its founders sold the company's stock, while metals and mining firms tumbled on data showing an unexpected fall in China's imports.
Recent outperformers also took a hit on a slew of worrisome global factors, including stronger-than-expected United States jobs data that raised the prospect of early U.S. rate hikes and a ratings downgrade for Italy.
Adding to the concerns, overseas investors have also started taking profits. Foreign institutional investors sold Indian shares worth 1.09 billion rupees on Friday.
"Today's fall was basically on tech stocks, especially on Infosys, and investors booked profits in banks. However, nothing fundamentally went wrong. Perhaps fundamentals are far more positive now. We expect more reforms to go through in this (parliament) session," said Deven Choksey, managing director, KR Choksey Securities.
The benchmark BSE index closed 1.19 percent lower at 28,119.40, while the broader NSE index ended down 1.17 percent at 8,438.25.
Infosys shares led the losses. The stock fell 4.8 percent, its biggest single-day fall since May 29, after some of the company's founders sold shares worth $1.1 billion.
The founders and their families sold 32.6 million shares in Infosys at a fixed price of 1,988.87 rupees each, a 4 percent discount to Friday's close.
Metals and mining stocks fell after China's imports shrank unexpectedly in November while export growth slowed, fuelling concerns the world's second-largest economy could be facing a sharper slowdown.
Tata Steel closed down 2 percent, Hindalco Industries ended 2.5 percent lower while Sesa Sterlite fell 3.7 percent.
Some recent outperformers also closed lower. Mahindra and Mahindra, which gained 5.4 percent in the past 10 sessions, closed down 3.5 percent.
Banks also fell on profit-taking. State Bank of India closed down 1.5 percent after gaining 18.9 percent in November. ICICI Bank ended 1.7 percent lower. It was up 7.9 percent in the previous month.
Among the gainers, ITC Ltd closed 1.7 percent higher, adding to its 2.1 percent gain in the previous session after reports the government was rethinking a potential ban on the sale of loose cigarettes.
Shares in Dolphin Offshore gained 4.7 percent after its Mexican client extended a contract with the company for three more years.
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FACTORS TO WATCH * Sterling, Aussie, kiwi suffer against stronger dollar * Oil slips towards $68 after Morgan Stanley cuts price forecast * Italy downgrade casts gloom over euro zone * Foreign institutional investor flows * For closing rates of Indian ADRs
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Politics/General Asia Macro data (Reporting by Indulal PM; Editing by Anupama Dwivedi)