BENGALURU, Jan 12 (Reuters) - Indian shares fell for the third session in a row on Thursday, with investors on edge ahead of earnings from IT companies after TCS's warning earlier this week and key domestic and U.S. inflation data for cues on the likely path for rate hikes.
The Nifty 50 index closed 0.21% lower at 17,858.20, while the S&P BSE Sensex declined 0.25% to 59,958.03. Both indexes opened higher before reversing course, as they have in each of the previous two sessions.
India's retail inflation in December likely held steady from November, a report due at 5:30 p.m. IST is expected to show. Still, the central bank head has pledged to continue fighting inflation despite the worst being "behind us".
"While the expectations suggest a cooling off in inflation, a lot depends on the commentary on the data as well as the components of price changes," said Narendra Solanki, head of fundamental research for investment services at Anand Rathi Shares and Stock Brokers.
Nine of the 13 major sectoral indexes declined, led by the oil & gas index's 1.02% drop. Oil prices rose 3% overnight, which hurts top importers such as India.
The volatility will remain ahead of key IT earnings, Solanki said.
Infosys Ltd and HCL Technologies Ltd closed 0.64% and 1.60% higher ahead of their quarterly reports due after the bell. IT stocks overall were up 0.43%.
Investors are wary since top IT company Tata Consultancy Services missed profit estimates earlier this week and flagged challenges about deal decisions in Europe.
U.S. inflation also moderated in December, a report due later in the day is expected to show. But, like the RBI, Federal Reserve officials have also indicated they would remain aggressive on rate hikes.
Meanwhile, foreign institutional investors extended their selling streak for the fourteenth day in a row on Wednesday, which also weighed on the market.
Among individual stocks, Paytm tumbled 6.21% after China's Alibaba Group sold shares worth $125 million in the digital payments company.
Reporting by Rama Venkat and Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza