Indian shares fell on Thursday, dragged by information technology stocks, as foreign selling continued amid persistent fears of a prolonged high-interest regime.

The Nifty 50 index fell 0.41 per cent to 17,379, while the S&P BSE Sensex edged 0.50 per cent lower to 59,116 as of 12:12 p.m.

Ten of the 13 major sectoral indexes fell with the high weightage information technology shedding 1.5 per cent.

All the ten constituents of IT index logged losses, led by Tata Consultancy Services, Infosys and Tech Mahindra, which earn a significant share of their revenue from the U.S.

The slide in IT stocks comes after official data showed prices of raw materials rose in the world's largest economy in February, implying inflation remained at elevated levels and heightening worries about interest rates staying high for longer.

IT companies are likely to witness some cutbacks in the next few months as customers rationalise their tech spending, said two analysts, adding that the long term outlook remained strong for the sector.

Meanwhile, foreign institutional investors (FII) offloaded a net ₹425 crore worth of equities on Wednesday.

Foreign portfolio investors (FPIs) have sold a net ₹38,789 crore ($4.70 billion) worth of Indian equities thus far into the year.

"A liquidity dry-up due to foreign selling, continuing weakness in earnings and lack of retail support will continue to pile the pressure on markets for the next few months," said Avinash Gorakshakar, head of research at Profitmart Securities.

Among individual stocks, Rail Vikas Nigam climbed over 9 per cent after emerging as the lowest bidder to make and maintain 200 Vande Bharat trainsets. The cost per set is ₹120 crore.

Bajaj Finserv rose nearly 3% on getting a regulatory license to start a mutual fund business.

Macrotech Developers gained nearly 5 per cent after the company estimated its pre-sales to grow at an average annual growth rate of 20 per cent and reach ₹20,000 crore by FY2026.

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