Sensex little changed in cautious trade

MUMBAI (Reuters) - Indian shares were little changed on Tuesday amid caution ahead of the expiry of monthly derivative contracts later this week and a speech from U.S. Federal Reserve Chair Janet Yellen later in the day.

Yellen's speech comes after a chorus of hawkish comments from other Fed officials unsettled global markets last week, casting doubt about a revival of foreign investments into emerging markets.

Foreign investors have bought a net $2.7 billion in Indian shares so far this month, and are now net sellers of just $128.8 million so far this year.

Traders said they expected markets to remain largely rangebound ahead of the expiry of derivatives on Thursday and ahead of the Reserve Bank of India's policy review on April 5.

"Markets are expected to remain rangebound ahead of the derivative contracts' expiry on Thursday," said Jagannadham Thunguntla, head of research, Karvy Stock Broking.

The Nifty was up 0.2 percent at 0845 GMT after falling as much as 0.43 percent earlier in the session.

The Sensex was up 0.1 percent after declining as much as 0.52 percent earlier.

India's biggest lender, State Bank of India, fell as much as 0.9 percent after HSBC downgraded the stock to "hold" from "buy", saying fundamentals were now priced in after a recent rally. It was trading 1.2 percent higher.

Meanwhile, drugmakers were under continued pressure. Lupin fell as much as 14.39 percent on reports it had received Form 483 observations for its central India plant from the U.S. Food and Drug Administration.

Lupin said the observations were "minor in nature" and that it did not expect any disruption to supply from the location.

Among the stocks that gained, Tata Steel rose 2 percent ahead of the company's board meeting on Tuesday, where it is widely expected to announce restructuring or selling of some of the European units and job cuts to save costs.

(Reporting by Manoj Rawal; Editing by Subhranshu Sahu)