BENGALURU: Indian shares fell for a second straight session on Wednesday, pulled down by heavyweight financials, as concerns over surging inflation and prospects of aggressive rate hikes by the U.S. Federal Reserve weighed.

The NSE Nifty 50 index ended down 0.83% at 17,807.65 and the S&P BSE Sensex fell 0.94% to 59,610.41, in line with global markets after hawkish comments from a Fed policymaker.

Fed Governor Lael Brainard said overnight she expected a combination of interest rate hikes and a rapid balance sheet runoff this year.

“Markets will be remaining in a cautious zone ahead of the Fed minutes, as well as the RBI’s policy meeting,” said Prashanth Tapse, vice president (research), Mehta Equities.

“Inflation is a new war for the whole world for another six to eight months, that would keep emerging markets like India under pressure. Markets will be very volatile because of this and we may see the impact of it in companies’ Q1 numbers.”

Indian shares end lower as financials, inflation woes drag

Oil marketing companies in India continued to raise pump prices on the back of elevated global crude prices, sparking worries of an acceleration in inflation.

The Reserve Bank of India’s (RBI) three-day monetary policy meeting begins on Wednesday, while the Fed will release later in the day minutes of its meeting, which investors will scrutinise for clues on rate hikes.

The RBI will delay its first interest rate rise by at least four months to August at the earliest, according to a Reuters poll of economists.

The Nifty Bank index fell 1.14% and the finance index dropped 1.6%, falling for a second straight session after a more than 4% jump on Monday.

Paytm parent One 97 Communications’ shares rose 4.6% after the digital payments firm said it should be able to achieve a breakeven for a key metric of profitability in one-and-a-half years.