Indian shares fall more than 2 pct on day

Tue, Jun 3 11:06 AM

NEW DELHI (Reuters) - India's main stock index extended losses to more than 2 percent on Tuesday morning, led by software and telecommunication stocks, amid political uncertainty worries and high inflation.

At 10:47 a.m., the 30-share BSE index was down 2.01 percent, or 322.98 points, at 15,740.20, with 23 stocks falling.

The broader NSE index dropped 2.06 percent to 4,641.95.

"With growth in question, inflation high, there is no compelling reason for investing in India for foreign investors," said Amitabh Chakraborty, president of equity at Religare Securities.

Foreign funds have pulled out more than $3.9 billion from Indian shares so far in 2008, pushing the BSE index down nearly 23 percent during the period.

Sentiment has also been weighed down by talk of a political rift in the ruling coalition over plans to raise retail fuel prices.

Political leaders are divided over the extent to which fuel prices should be raised, delaying the government decision on compensating state firms selling fuels below cost, a top oil ministry official said on Monday.

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