MUMBAI, June 8 (Reuters) – Indian shares crept higher on
Tuesday tailing gains in Asian markets, but investors were
circumspect on uncertainties in the debt-ridden euro zone that
has weighed on global sentiment for many weeks.

State-run explorer Oil and Natural Gas Corp (ONGC.BO) and
state refiners Indian Oil Corp (IOC.BO), Bharat Petroleum Corp
(BPCL.BO) and Hindustan Petroleum Corp (HPCL.BO) fell between
1.2 percent and 5.5 percent after the government deferred till
next week a decision on raising fuel prices. ID:nSGE656090]

Reliance Communications (RLCM.BO), which had jumped 26
percent in four sessions as talks swirled about a possible
stake sale, eased 1 percent after AT&T (T.N) denied media
reports it was in talks. [ID:nSGE6560AL]

Financials gained on expectations demand for loans will
pick up as the economy advances.

By 11:13 a.m. (0543 GMT), the 30-share BSE index .BSESN
was trading up 0.21 percent at 16,815.86 points, with 21 of its
components gaining.

“Investors are still sceptical about investing in riskier
assets,” said K.K. Mital, head of portfolio management services
at Globe Capital.

“More negative news from Europe cannot be ruled out. It may
not be severe but the sentiment will take time to improve.”

Foreign funds, which pulled out almost $2 billion from
Indian equities in May as euro zone’s debt woes hit risk
appetite, have bought around $37 million of stocks so far in
June.

State Bank of India (SBI.BO), the country’s largest lender,
rose 1.5 percent, while rival HDFC Bank (HDBK.BO) rose 0.2
percent.

Mortgage lender Housing Development Finance Corp (HDFC.BO)
climbed 1.6 percent.

Price pressures will start to ease if the country gets a
normal monsoon season but the central bank will further tighten
monetary policy, Deputy Governor Subir Gokarn said on Tuesday.
[ID:nSGE65704W]

He also said the government may put off reducing fuel
subsidies for the foreseeable future to avoid hurting consumers
who are already suffering from high food prices.

“From a political and welfare perspective, it is difficult
to impose on them a hike in fuel prices at the time when they
are already dealing with high food prices. Balancing out these
two factors will drive the timing,” Gokarn told reporters on
the sidelines of a Nomura investment conference in Singapore.

Oil & Natural Gas Corp (ONGC.BO), which is required to
partly subsidise fuel prices, was trading down 1.2 percent.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum
were trading 3-5.5 percent lower. The refiners are only partly
compensated by the government for selling fuel at state-set
lower prices.

In the broader market, gainers were more than twice the
number of losers on volume of 89 million shares.

The 50-share NSE index was up 0.3 percent at 5,047.

STOCKS ON THE MOVE

* Metals makers Sterlite Industries (STRL.BO), Hindalco
(HALC.BO), Tata Steel (TISC.BO) and Jindal Steel and Power
(JNSP.BO) rose between 0.9 and 1.8 percent, as London copper
futures rose nearly 1 percent after shedding almost $900 in a
six-day selling spree. [ID:nSGE65700X]

* Oil explorer Cairn India (CAIL.BO), a unit of UK’s Cairn
Energy (CNE.L), rose 1.5 percent to 295.50 rupees as crude oil
prices gained towards $72 per barrel.

MAIN TOP 3 BY VOLUME

* Spicejet (SPJT.BO) on 6.2 million shares.

* Reliance Communications on 2.1 million shares

* Unitech (UNTE.BO) on 1.3 million shares.

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Euro, yen crosses lifted by round of short covering
[FRX/]
* Oil gains towards $72 on expected U.S. inventory drop
[O/R]
* Euro, stocks edge up as risk selloff pauses
[MKTS/GLOB]
* Wall St tumbles, S&P’s lowest close in 7 months
[.N]
* For closing rates of Indian ADRs
INADR