BENGALURU: Indian shares ended lower on Wednesday as investors booked profits across sectors, ahead of key U.S. inflation data that could influence the size of a likely reduction in Federal Reserve interest rates next week.

The Nifty 50 index fell 0.49% to 24,918.45, while the S&P BSE Sensex lost 0.49% to 81,523.16.

Both benchmarks struggled for direction for the majority of the session before profit booking intensified in the final two hours of trade.

“Investors booked profits on the day at near record high levels as they remained cautious ahead of the U.S. inflation data,” said Kranthi Bathini, director of equity strategy at Wealthmills Securities.

U.S. consumer price index (CPI) data, due after India market hours on Wednesday, is expected to show inflation drifting closer to the Fed’s 2% target, which could prompt the U.S. central bank to opt for a 25 basis-point rate cut next week.

Indian shares set to open flat ahead of US inflation data

Meanwhile, the domestic oil and gas sub-index shed nearly 2% after heightened concerns over softening global demand sent Brent crude futures to their lowest levels since December 2021 on Tuesday. Oil prices recovered a tad on the day, but still hovered around Tuesday’slows.

While a drop in prices is generally a positive for crude importers such as India, the sharp dip on the back of a weak demand forecast hurt prospects for the global economy and added to investor caution ahead of the U.S. inflation report, two analysts said.

Upstream oil company Oil & Natural Gas Corp lost 3.5% after Nuvama said that the company’s earnings are set for a free fall due to the drop in crude prices.

Barring consumer stocks, all the other major sectors logged losses.

Auto stocks lost 1.24%, with Tata Motors dropping 5.74%, after UBS forecast a 21% slump for the Indian automaker over the next 12 months, citing weakening financials.