* Tata Motors shares drop 12 pct
* Rupee fall, global risk aversion weigh
* Derivatives expiry, GDP eyed for Thurs
MUMBAI, May 30 (Reuters) - Indian shares fell on Wednesday, dragged down by a 11.9 percent drop in Tata Motors stocks after the auto maker reported disappointing quarterly earnings, while caution also prevailed a day before GDP data and the expiry of derivatives.
A renewed fall in the rupee to near record lows contributed to the weak sentiment, as did the fall in Asian shares, both because of intensifying worries about Spain's banking woes and its debt yields.
The global risk aversion has come at a time when investors are already worried about India's economic and fiscal outlook.
The country is expected to say on Thursday the economy grew at 6.1 percent in the January-March quarter, unchanged from the October-December quarter, and still the lowest growth levels in almost there years.
"Markets looking interesting to short, as more rupee weakness is in the cards. Nifty can touch 4,700 in next few weeks in absence of any positive triggers" Prakash Diwan, Head - Institutional Clients Group ay Asit C.Mehta Investment Intermediates
India's main 30-share BSE index fell 0.77 percent to close at 16,312.15 points, snapping two sessions of gains.
The broader 50-share NSE index declined 0.79 percent to 4950.75 points.
Traders say Thursday could be volatile as the GDP data comes on the same day that derivatives will expire at the end of the session.
The rupee will also be an important factor after it fell to 56.23/24, marking a record closing low, though still off the all-time low of 56.40 hit on Thursday.
Shares in Tata Motors dropped 11.9 percent on Wednesday, wiping more than $1.5 billion off the value of the Indian car maker, following deep disappointment about the fall in operating margins at its Jaguar Land Rover unit.
That was Tata Motors' biggest daily percentage fall since April 2009, though some analysts see the stock as oversold.
"Tata Motors is oversold, expectations were too high. I expect further sales by Tata Motors to come on higher margins" Diwan said.
State-run gas utility GAIL India fell 1.4 percent after posting a drop in net profit in the Jan-March quarter, missing analyst estimates.
Recent outperformers fell, with State Bank of India fell 1.04 percent after rising 9.4 percent over the previous five sessions. ICICI Bank shares fell 2.56 percent.
The falls in Tata Motors helped rival Maruti Suzuki gain 2.3 percent, given investors saw the domestic auto maker as oversold after a 16.10 percent fall so far in May.
Among other gainers, Sun Pharma rose 2.1 percent after reporting higher that expected earnings in Jan-March quarter.
* Euro extends falls, loses 1 pct on day vs yen * Oil falls on Spain, China worries * European shares, euro hit by Spain's debt fears * Foreign institutional investor flows * For closing rates of Indian ADRs
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