BENGALURU: Indian shares fell for a fourth straight session on Wednesday as investors braced for the US Federal Reserve to announce a quicker unwinding of pandemic-era stimulus, while worries about the Omicron coronavirus variant further dented sentiment.

The NSE Nifty 50 index closed 0.6% lower at 17,221.4, while the S&P BSE Sensex slipped 0.57% to 57,788.03.

The blue-chip indexes have declined more than 7% from record highs hit in October, but are still outperforming Asian peers with gains of more than 21% so far this year.

The Fed, at 1900 GMT, is expected to announce that it is speeding up the end of its bond purchases and signal a turn to interest rate rises next year as a guard against inflation at near four-decade highs.

Indian shares fall on inflation worries, eye global central bank decisions

US rate increases could potentially lead to fund outflows from countries with a twin deficit like India, said independent market analyst Ajay Bodke.

The Indian rupee slipped as much as 0.5% to 76.24 against the dollar, its weakest level since June 2020.

Adding to downbeat sentiment, the World Health Organization said preliminary evidence suggested COVID-19 vaccines may be less effective against infection and transmission linked to Omicron, which also carries a higher risk of reinfection.

In Mumbai, the Nifty Realty index was among the hardest hit, sliding 1.9%.

Heavyweight shadow lenders Bajaj Finance and Bajaj Finserv were the biggest losers on the Nifty with declines of 3.1% and 2.7%, respectively.

One97 Communications, parent of digital payments firm Paytm, dropped 7.8% after a lock-in period for institutional investors expired, compounding worries for the stock following a dismal market debut last month.

Meanwhile, TVS Motor rose as much as 7.4% before settling 2.1% higher, as the two-wheeler maker said it will develop electric vehicles with BMW's motorcycle brand in India.