INDIA STOCKS-Indian shares extend losses as high oil prices heighten inflation worries

By Bharath Rajeswaran and Vivek Kumar M

Oct 22 (Reuters) - Indian shares fell for a third straight session on Thursday, as an escalating Middle East war pushed oil prices higher to $112 per barrel, stoking inflation concerns for the world's third-largest importer of crude.

The benchmark Nifty 50 .NSEI fell 0.54% to 22,687.65, and the Sensex .BSESN shed 0.62% to 73,249.39. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 dropped 1.1% and 0.9%, respectively.

Other Asian markets also slumped to near three-month lows, after more Houthi attacks in Saudi Arabia intensified concerns over broader escalation of conflict and fears of supply disruptions. O/R

The attacks prompted the US to order some diplomats and family members to leave its missions in the kingdom.

"Higher crude prices remains the key overhang for markets as they heighten price pressures in the economy, besides potentially weighing on corporate profit margins," said Sanjeeb Hota, director, head of strategy of equities at Standard Chartered India.

"It should also be noted that markets had logged strong gains last week and this could just be profit taking, rather than any adverse view on earnings," Hota said.

Thirteen of the 16 major sectors logged losses, with IT .NIFTYIT, energy .NIFTYENR and FMCG .NIFTYFMCG losing the most percentage-wise.

Heavyweight stocks on the benchmarks, HDFC Bank HDBK.NS and Reliance Industries RELI.NS, fell 1.8% and 2%, respectively.

Mahindra & Mahindra Financial Services MMFS.NS slid 3.3%, with multiple brokerages flagging mounting funding costs and risks from insurance distribution reforms.

Nestle India NEST.NS dipped 2.8%, Abbott India ABOT.NS dropped 1.3% and Zydus Wellness ZYDS.NS declined 3.4% after receiving notices from India's food safety regulator.

Abbott said it was not aware of the social media content cited by the regulator until receiving the notice, and that it did not endorse the claims. Nestle said the notice reiterated earlier label-related concerns to which it had submitted a detailed response. Zydus Wellness did not respond to Reuters' request for comment.

Cybersecurity firm eMudhra EMUD.NS slid 20%, taking its two-session losses to 36%, after the Indian Computer Emergency Response Team issued an advisory stating that some of eMudhra's intermediate certificates were compromised.