Indian shares to start lower on weak Asian cues

MUMBAI, July 3 - Indian shares are expected to fall in early trading on Friday as weak Asian markets dampen sentiment and investors hold back from taking large positions ahead of the federal budget on Monday.

The market could take some trading direction from the railway budget, due to be presented in parliament around 11 a.m. (0530 GMT), but the overall mood is likely to remain cautious, traders said.

"I expect the market to remain soft because of the weakness in Asian markets. People are also likely to remain cautious till Monday, when the market could get its direction," said S.P. Tulsian, an independent investment analyst.

He expects the main index to slip about 150 points in trade.

On Thursday, the 30-share BSE index <.BSESN> eked out modest gains in volatile trade, up just 0.09 percent to 14,658.49 points, ignoring an annual government survey that suggested sweeping reforms to fuel economic growth.

Overnight, U.S. stocks fell more than 2 percent after government data showed the U.S. economy shed more jobs than expected in June, dampening the outlook for recovery.

Asian stocks were also trading lower. Japan's Nikkei <.N225> was down 0.9 percent, while the MSCI index of Asia-Pacific shares excluding Japan <.MIAPJ0000PUS> was down 0.6 percent.

Nifty stock futures trading in Singapore <SINc1> were down 0.8 percent, indicating a weak opening in India. ---------------MARKET SNAPSHOT @ 0338 GMT--------------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 <.SPX> 896.42 -2.91% -26.910 USD/JPY <JPY=> 95.97 0.03% 0.030 10-YR US TSY YLD <US10YT=RR> 3.5023 -- 0.000 SPOT GOLD <XAU=> $932.35 0.40% 3.700 US CRUDE <CLc1> $66.48 -0.37% -0.250 DOW JONES <.DJI> 8280.74 -2.63% -223.32 ASIA ADRS <.BKAS> 106.70 -2.77% -3.04 -------------------------------------------------------------

STOCKS TO WATCH

* GVK Power & Infrastructure Ltd <GVKP.BO>, after three sources told Reuters the company plans to sell shares worth up to $150 million. [nBOM496764].

* Maytas Infra Ltd <MAIL.BO>, after the construction firm, linked to the founders of fraud-hit Satyam Computer <SATY.BO>, said it had worked out a debt restructuring package with its lenders. About 3 billion rupees would be released immediately, with an additional 3 billion to be released in three months.

* Ashok Leyland Ltd <ASOK.BO>, India's second-biggest bus and truck maker, after the Business Line news paper reported it had bagged a 3-billion rupee order for 1,500 buses from Tamil Nadu State Transport Corp.

FACTORS TO WATCH * For technical analysis, double click on www.reutersindia.net * India rupee eases as dlr gains overseas, stocks eyed [INR/] * Indian bond report [IN/] * FOREX-Dollar, yen hold gains as job losses cloud outlook

[FRX/] * Oil falls towards $66 after bleak U.S. jobs data [O/R] * Stocks, oil drop after U.S. jobas data; dlr up [MKTS/GLOB] * Bleak payrolls report mauls Wall St; volume thin [.N] * For closing rates of Indian ADRs <INADR>