BENGALURU, June 24 (Reuters) - Indian shares fell on Monday, weighed down by financials, while some small- and mid-cap stocks slipped after a report said the markets regulator was investigating allegations of "front-running" at Quant Mutual Fund.

The NSE Nifty 50 was down 0.14% at 23,467.75 as of 10:48 a.m. IST, while the S&P BSE Sensex shed 0.2% to 77,069.26.

"It's a reality that there is valuation comfort only in select pockets, so the benchmarks could continue to trade near current levels," said Saurabh Jain, assistant vice president of research of retail equities at SMC Global.

The earnings season and the national budget announcement next month will influence the trajectory of the markets, Jain added.

Financials and private banks, which outperformed other sectors last week, shed 0.25% and 0.60%, respectively, weighing on the benchmarks.

The broader, more domestically focussed small- and mid-caps each traded 0.1% lower.

Local news website Money Control reported that the markets regulator was probing Quant Mutual Fund over allegations of front running - or dealing on price-sensitive information before its general release.

Quant, one of the fastest-growing fund houses in the country and an active investor in small- and mid-cap stocks, said it is responding to the regulator's queries.

"The Securities and Exchange Board of India's investigation on Quant Mutual Fund is a slight sentiment-negative for the markets," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Aurobindo Pharma, Steel Authority of India and Aegis Logistics, which are among Quant's top holdings in broader markets in terms of value, shed 1%-4.5%.

RBL Bank, among Quant's top small-cap holdings in terms of value, fell 3.7% and was the top percentage loser in the private bank index.

Century Enka, HFCL and Arvind lost 2%-4%. The stocks are Quant's top holdings in terms of ownership of outstanding shares.

Meanwhile, drugmaker Cipla dropped 2.3% after receiving observations from the U.S. drug regulator for one of its facilities.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema )