BENGALURU: Indian shares closed lower for a third consecutive session on Wednesday, hurt by financials and auto stocks, while a red hot inflation reading for March fuelled expectations of a sooner-than-anticipated interest rate hike.

The NSE Nifty 50 index closed 0.31% down at 17,475.65, and the S&P BSE Sensex declined 0.41% to 58,338.93.

For the truncated week, due to market holidays on Thursday and Friday, the indexes fell more than 1%.

Meanwhile, India’s retail inflation rose nearly 7% year-on-year in March, its highest in 17 months and above the upper limit of the central bank’s tolerance band for a third straight month.

“Sharply higher than expected March inflation reading further increases the challenge for the MPC (Monetary Policy Committee) ... We assign a very high probability of a 25 basis points rate hike in the June policy along with a stance change,” Kotak Mahindra Bank’s Senior Economist Upasna Bhardwaj said.