(Reuters) - Indian shares snapped two sessions of gains on Wednesday, tracking global markets after data showed rising U.S. inflation and on comments from Fed officials that rekindled prospects of an interest rate hike as early as June.
Asian shares sagged after comments from Atlanta Fed President Dennis Lockhart - seen as a policy centrist - on Tuesday predicted there will be two or three rate hikes, a view echoed by San Francisco Fed President John Williams.
Compounding these concerns, U.S. consumer prices recorded their biggest increase in more than three years in April as gasoline prices and home rents rose.
"Yesterday's comments from Lockhard and Williams indicate that the Fed is uncomfortable with the low probability markets are assigning to a June rate hike. This will begin to weigh down on markets whenever they head higher," said Varun Khandelwal, Director, Bullero Capital in Delhi.
The Nifty was down 0.52 percent at 7,850.75 as of 0906 GMT.
The Sensex lost 0.48 percent at 25,650.83.
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Blue chips were largely heading south, with IT exporters Infosys Ltd down 0.89 percent and Tata Consultancy Services dropping 1.3 percent.
Among decliners, auto manufacturers Maruti Suzuki Ltd and Mahindra and Mahindra Ltd lost over 1 percent each after UK-based vehicle testing agency Global NCAP on Tuesday gave zero star safety ratings to Maruti's Celerio and Eeco models, as well as Mahindra's Scorpio.
However, State Bank of India and its subsidiaries - State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Mysore - gained after announcing that India's largest lender plans to merge all the five subsidiaries.
(Reporting by Manoj B Rawal; Editing by Sherry Jacob-Phillips)