BENGALURU: Indian equities fell in line with Asian peers on Wednesday, with technology stocks leading the decline as US Treasury yields hit two-year highs, although losses were plugged by gains in non-bank lender Bajaj Finance after strong results.

The blue-chip NSE Nifty 50 index was down 0.41% at 18,038.25 by 0444 GMT, while the S&P BSE Sensex slipped 0.48% to 60,463.17, after falling as much as 0.9% each to their lowest in over a week earlier in the session.

"The hardening of US yields has fuelled fears of a higher-than-expected Federal Reserve interest rate hike, which has seeped through to Indian markets and triggered consolidation after a solid run," said Aishvarya Dadheech, fund manager at Ambit Asset Management in Mumbai.

The Nifty and Sensex had climbed more than 10% from lows hit in December, lifted by advances in stocks of automakers and energy companies.

India's Nifty 50 drops most in a month as automakers slide

A global technology stock sell-off overnight spooked Asia's share markets on Wednesday, as investors worried about inflation and braced for tighter US monetary policy.

Higher US yields and interest rate hikes tend to be make risky assets like emerging market equities less attractive, leading to outflows of funds from the region.

Dadheech, however, said India was still in a sweet spot considering "decent" earnings growth and indicators pointing to strong economic recovery despite a surge in COVID-19 cases.

The Nifty IT index was the worst hit among sub-indexes, tumbling 2.2% to its lowest since late-December. IT major Infosys slid 2.3%.

Heavyweight lender Bajaj Finance rose as much as 3.9% to a three-month high after it reported a surge in quarterly profit and better asset quality, helping limit losses on the benchmark indexes.

Software firm Tata Elxsi jumped 5% and fertilizer producer DCM Shriram surged 16% after the companies reported strong quarterly results on Tuesday.

Automaker and Nifty component Bajaj Auto climbed 1.7% ahead of its quarterly results.