Indian shares retreat from near 3-year highs on profit-taking

* BSE index falls 0.2 pct; NSE ends 0.23 pct lower

* BSE index tops 21,000 intraday for first time in nearly 3 years

* Foreigners buy shares for 14th consecutive session

* Market awaits cbank policy review on Oct (KOSDAQ: 039200.KQ - news) . 29 (Adds index close, price action and analyst's comments)

By Abhishek Vishnoi

MUMBAI, Oct 24 (Reuters) - India's benchmark BSE index retreated on Thursday from a near three-year high of above 21,000 on profit-taking, with software exporters including Tata Consultancy Services taking the brunt of the selling.

The benchmark BSE index touched 21,039.42 before slipping in the red for the day. The last time it was above 21,000 was on Nov. 8, 2010. The index's all-time high is 21,206.77, hit in January 2008.

Shares have benefited from a return of global risk appetite as poor U.S. data has pushed back expectations of any tapering of the Federal Reserve's monetary stimulus until 2014.

Foreign investors have continued to buy local shares, remaining net buyers for a 14th consecutive session. Provisional exchange data showed a net purchase of 6.44 billion rupees ($104.55 million) on Wednesday, bringing the total to about 117.34 billion rupees during that period.

However, investors are also taking the opportunity to book profits especially on recent outperformers.

"India's economic fundamentals are not supporting the market, allocations just due to global factors are not justified. At some point that money will also find it difficult to allocate further," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

Beyond 21,000 valuations become very difficult to justify, Srivastava added.

The focus is now on the central bank's policy review on Oct. 29, at which it is expected to raise its key rate by 25 basis points. Five key states are also slated to go for elections in November and December, ahead of general elections due by May.

The benchmark BSE index fell 0.2 percent, or 42.45 points, to end at 20,725.43, after earlier rising as much as 1.3 percent.

The broader NSE index fell 0.23 percent, or 14 points, to end at 6,164.35, falling for a third consecutive session.

In IT shares, Tata Consultancy Services Ltd fell 2.5 percent, Wipro Ltd (BSE: WIPRO.BO - news) lost 4.4 percent, while Infosys Ltd ended 0.5 percent lower on profit taking.

The NSE index for IT shares had risen 44.8 percent in 2013 compared with the NSE index's returns of 4.4 percent as of Wednesday's close.

Among other blue chip companies, Reliance Industries fell 1.4 percent after gaining as much as 1.6 percent earlier in the day.

Hindustan Unilever Ltd (BSE: HUL.BO - news) fell 0.8 percent after Unilever (NYSE: UL - news) on Thursday reported slower sales growth for the third quarter, providing further evidence that a slowdown in emerging markets is hitting demand for its consumer goods.

Jet Airways fell 1.7 percent after the company reported its worst quarterly loss on Wednesday, squeezed by high fuel costs and a weaker local currency.

Ambuja Cements Ltd fell 1.3 percent and ACC Ltd lost 0.2 percent after the cement makers reported lower-than-expected July-September earnings.

Exide Industries Ltd shares fell 1.6 percent adding to Wednesday's 2.2 percent decline after the company said its September-quarter net profit fell 1.3 percent to 1.19 billion rupees.

However among shares that rose, IPCA Laboratories Ltd ended 2.1 percent higher after the company said its July-September profit rose 3.5 percent to 1.29 billion rupees.

For additional stocks on the move double click FACTORS TO WATCH * Euro pares gains after PMI data * Oil stabilises on strong Chinese economic data * Chinese data helps shares rebound, euro pares gains * Foreign institutional investor flows [INFII INFII01] * For closing rates of Indian ADRs ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea... S.E. Asia.......

Hong Kong... Taiwan.... Australia/NZ....

India....... China.....

OTHER MARKETS: Wall Street ....

Gold ....... Currency.. Eurostocks.....

Oil ........ JP bonds... ADR Report .....

LME metals. US bonds.. Stocks News US.. Stocks News Europe

DIARIES & DATA: Indian Data Watch Asia earnings diary U.S. earnings diary European diary Indian diary Wall Street Week Ahead Eurostocks Week Ahead

TOP NEWS:

For top Asian company news, double click on:

U.S. company news European company news

Forex news Global Economy news

Technology news Telecoms news

Media news Banking news

Politics/General Asia Macro data (Editing by Anand Basu)