BENGALURU: Indian shares succumbed to selling pressure in a volatile session, as a pullback in financials after a recent rally weighed and fading hopes of an early US rate cut also hurt sentiment.

The NSE Nifty 50 index fell 0.38% to 21,771.70, while the S&P BSE Sensex settled 0.49% lower at 71,731.42.

Both indexes rose about 0.5% each during the session, before reversing gains in the final hour of the trading session.

The Nifty volatility index rose 6.26% to hover around its 10-month high, hit on Jan. 30.

“Valuations have gone through the roof, driven by high liquidity; this could trigger bouts of volatility in the markets,” said Deven Choksey, managing director of DRChoksey Finserv.

While the outlook for Indian markets remains positive, there could be further consolidation after the recent rally to record highs, Choksey added.

Financial services, the highest weighted of the 13 major sectoral indexes, fell 0.58%. It had gained 1.7% in the previous week, its best in two months.

Meanwhile, fading hopes of early rate cuts in the US, on the back of strong labour market data and weakness in China’s market, dragged Asian equities down.