BENGALURU, Nov 18 (Reuters) - Indian shares fell for the second session in a row on Friday as investors booked profit after recent gains, especially as yet another U.S. Federal Reserve official doused hopes of less aggressive monetary policy.
The benchmark S&P BSE Sensex fell 0.42% to 61,489.95 and NSE Nifty 50 index dropped 0.47% to 18,258.20 as of 0524 GMT. They are down about 0.4% for the week.
Both indexes had gained more than 2% in the wake of relatively soft U.S. inflation data last week, which had rekindled bets for smaller rate hikes.
But they have dropped about 0.75% in the past two sessions as an increasing number of Fed officials fired warning shots on interest rates.
"Indian markets are in the overbought zone. Geopolitical tensions and the Fed again being on the hawkish mode are keeping Asian markets under pressure and Indian markets under profit-taking zone," said Prashanth Tapse, vice president of research at Mehta Equities.
With corporate earnings mostly done, the markets will be trading sideways until the next Fed rate decision in early December, Tapse said.
St. Louis Fed President James Bullard and Minneapolis Fed Bank President Neel Kashkari late on Thursday batted for more rate hikes to tackle inflation.
The recent strength in Indian stocks is also down to foreign investors' participation.
They have purchased a net $3.52 billion worth of equities so far this month, compared with marginal withdrawals worth $0.52 million in October, Refinitiv Data shows.
Among stocks, Bajaj Healthcare surged as much as 7.5% after it completed the U.S. health regulator's pre-approval inspection of its facility in Gujarat
All sectoral indexes were lower, except one. The public sector bank index rose 1.1%.
($1 = 81.5100 Indian rupees)
Reporting by Nallur Sethuraman in Bengaluru; Editing by Savio D'Souza and Janane Venkatraman