MUMBAI, Aug 12 (Reuters) - Indian shares fell 1.5 percent on Wednesday, as investor caution ahead of the conclusion of the U.S. Federal Reserve's two-day meeting weighed on markets across Asia following a drop on Wall Street overnight. Worries that a shortfall in crucial monsoon rains will hit economic growth and concerns over pricey stocks also hurt sentiment, traders said. Private-sector lender ICICI Bank, outsourcer Infosys Technologies and engineering and construction firm Larsen & Toubro were among the major losers on the main index. Energy giant Reliance Industries, which has the most weight in the main index, fell 1.4 percent to 1,971 rupees, and state-run explorer Oil and Natural Gas Corp slid 2.8 percent to 1118.90 rupees as oil prices fell slightly below $70. Sun Pharmaceutical, India's top drugmaker by market value, bucked the trend and rose 2.5 percent to 1,235.50 rupees after it got the U.S. Food and Drug Administration's approval to launch its generic version of GlaxoSmithKline's Imitrex tablets to treat migraine. The company also received U.S. regulatory approval to launch oxaliplatin injections, the copycat version of Sanofi-Aventis' Eloxatin that is used to treat colon and rectal cancer. By 11:31 a.m. (0601 GMT), the 30-share BSE index was down 1.5 percent at 14,847.55 points, with 27 stocks declining. "The downward trend could continue for a few more days because we just don't know how much of a negative impact the weak monsoon is going to have," Ambareesh Baliga, vice president of Karvy Stock Broking, said. "Liquidity was driving up the market till now, but that looks like it is drying up." The benchmark nosed up 0.4 percent on Tuesday, after shedding 5.6 percent over the past three sessions. It had slid 3.25 percent last week after jumping 16 percent over the previous three weeks, buoyed by a worldwide equities rally on strong corporate earnings and improving signs of a global economic recovery. The index has leapt 87 percent from a 2009 low in early March, and is up more than 56 percent this year after slumping by more than half in 2008, raising concerns about rich valuations. ICICI Bank fell 2.5 percent to 699.05 rupees, while Infosys eased 1.8 percent to 2,043.50 rupees. Larsen & Toubro dropped 3.3 percent to 1,397 rupees. In the broader market, losers led gainers by more than 2 to 1 on relatively moderate volume of 109.9 million shares. The 50-share NSE index was down 1.5 percent at 4,406.55. Asian shares were lower on Wednesday, with Japan's Nikkei down 1.3 percent, while MSCI's measure of other Asian markets fell 1.1 percent. The U.S. Federal Reserve is expected to keep U.S. interest rates steady at near zero at a meeting that concludes on Wednesday, but end its long-term government securities buying programme amid signs the economy is stabilizing from a deep recession. Policymakers will steer a careful course in acknowledging signs a turnaround may be near without triggering expectations that interest rate rises are imminent. COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.
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