* BSE falls 1.21 pct, NSE falls 1.23 percent
* Focus shifts to July-September earnings
* Reliance slumps on brokerage downgrade
By Abhishek Vishnoi
MUMBAI, Oct 8 (Reuters) - India's main stock index fell for a second straight session on Monday, marking its biggest daily fall since July 27, as profit-taking, coupled with business outlook concerns, hit recent outperformers such as Reliance Industries.
slumped after anti-corruption activists accused India's biggest property developer of improper dealings with the son-in-law of ruling party chief Sonia Gandhi, which was denied by both the company and the person.
Indian shares were due for a consolidation, analysts said, as the focus shifts to the quarterly earnings reporting season, after the benchmark index
hit 17-months highs last week. Infosys
is due to report earnings on Friday.
Comments from Finance Minister P. Chidambaram about plans to unveil a "feasible" fiscal plan and his support for the government's recent reform measures had muted impact given they were seen as re-iterating his previous stance.
"Markets are getting consolidated. From Friday, earnings will begin. The street will focus more on quarterly numbers," said Vaibhav Sanhghvi, director at Ambit Capital.
"From now on, markets will get aligned and will react the way the numbers come."
The BSE index
fell 1.21 percent, or 229.48 points, to end at 18,708.98 points after hitting on Friday its highest intraday level since May 2, 2011.
The 50-share NSE index
fell 1.23 percent, or 70.95 points, to end at 5,676 points, having hit its highest intraday level since April 28, 2011 on Friday.
fell 1.5 percent, down for a fourth consecutive session, ahead of its Q2 results expected on Friday.
Investors worry the software service exporter will have to cut its guidance to reflect the stronger rupee
and a potential weakening in global demand.
fell 4.5 percent after Morgan Stanley cuts its rating to 'underweight' from 'equal-weight', citing expectations for weaker refining margins and valuation concerns among other factors.
Shares in the energy conglomerate had gained 2.9 percent over the previous three sessions.
Profit-taking hit Indian banks after recent fiscal and economic reforms had sparked a rally in the sector by raising the prospect of potential interest rate cuts from the central bank.
State Bank of India
shares fell 3 percent after surging 21.5 percent from the start of September to Friday's close. ICICI Bank
dropped 1.4 percent.
India's biggest property developer DLF Ltd
7.3 percent, posting its biggest daily fall since Feb. 22, as investors worried about the fallout from the allegations about importer transactions levelled by the activists on Friday.
The company and Sonia Gandhi's son-in-law, Robert Vadra, denied the accusations over the weekend.
Shares in Hindalco Industries
fell 3.6 percent after Citigroup downgraded the non-ferrous metals producer to 'sell' from 'buy' citing risks such as rising costs for fuel and materials, as well as slower clearance for projects.
However, among gainers, telecom stocks rose after an Indian ministerial panel on Monday approved a proposal to charge mobile phone carriers a one-time fee for their existing second-generation airwave holdings based on a price to be determined by an upcoming auction.
Bharti Airtel rose 1.8 percent, while IDEA Cellular rose 3.6 percent.
Shares in Indian infrastructure companies gained as the government continued its push to bolster the sagging sector, announcing plans to set up a special body this week to speed up projects in the sector
rose 1.45 percent, after dropping 11.7 percent in the previous two sessions after Essel Group units sold a combined 5.54 million shares in the Indian construction firm.
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FACTORS TO WATCH
* FOREX-Dollar, yen recover on growth, earnings worries
* Brent slips below $111 after China growth warning
* Global growth worries hit shares and oil
* Foreign institutional investor flows
* For closing rates of Indian ADRs
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(Additional reporting by Manoj Dharra; Editing by Rafael Nam)
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