(Adds analyst quote, details, background) BENGALURU, Oct 21 (Reuters) - Indian shares slipped on Thursday, as technology stocks fell on fears of steep valuations, outweighing gains in energy stocks. The NSE Nifty 50 index was down 0.7% at 18,134, while the S&P BSE Sensex fell 0.8% to 60,770 by 0551 GMT. The Nifty IT index was the top drag among the sectoral indexes, falling 2%. “Certain pockets, where valuations have become lofty and have seen frenzy buying in small and midcap indexes, are seeing a correction,” said Saurabh Jain, assistant vice president of research at SMC Global Securities. The Nifty mid-cap index was down 1.1%, while the small cap index dropped 0.7%. “Largely, IT companies have reported good set of numbers. But the valuations are rich in the sector and there is a good amount of room for correction.” Refinitiv Eikon data showed that the Nifty trades at a price-to-earnings ratio of 22.8 times forward earnings estimates. “Sustained selling by institutional investors indicate that smart money regards the market as overheated and over-valued,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Data from Refinitiv also showed that domestic institutional investors sold $1.03 billion worth of securities in Indian capital markets in the past one week. Among shares, oil explorer Oil and Natural Gas Corp rose 1.8%, Indian Oil Corp gained 2.9%, Bharat Petroleum Corp was up 1.5% and Hindustan Petroleum Corp rose 3.7%. Future Retail fell 4% after a Singapore arbitration panel ruled that the retailer must take part in arbitration over a commercial dispute with Amazon.com Inc . Department store chain Shoppers Stop rose as much as 15.1% on a smaller loss in the September quarter. Havells India dropped as much as 9.6% after it posted a fall in quarterly profit. Investors now eye September-quarter results from a slew of companies, including Asian Paints, JSW Steel , TVS Motor Co and Biocon. (Reporting by Nallur Sethuraman and Gaurav Dogra in Bengaluru; editing by Uttaresh.V)