BENGALURU, April 13 (Reuters) - Indian shares closed lower for a third consecutive session on Wednesday, hurt by financials and auto stocks, while a red hot inflation reading for March fueled expectations of a sooner-than-anticipated interest rate hike.
The NSE Nifty 50 index closed 0.31% down at 17,475.65, and the S&P BSE Sensex declined 0.41% to 58,338.93.
For the truncated week, due to market holidays on Thursday and Friday, the indexes fell more than 1%.
"Macros are quite a concern. With rising yields, foreign institutional investor flows are also negative. We are in to the results season. There is cost inflation for several firms," said Anita Gandhi, a whole-time director at Arihant Capital Markets
Refinitiv data showed foreign investors sold equities worth $1.02 billion in the last four trading sessions.
Meanwhile, India's retail inflation rose nearly 7% year-on-year in March, its highest in 17 months and above the upper limit of the central bank's tolerance band for a third straight month.
"Sharply higher than expected March inflation reading further increases the challenge for the MPC (Monetary Policy Committee) ... We assign a very high probability of a 25 basis points rate hike in the June policy along with a stance change," Kotak Mahindra Bank's Senior Economist Upasna Bhardwaj said.
The Nifty finance index, bank index and auto index were down between 0.75% and 0.87%.
HDFC Ltd, HDFC Bank Bajaj Finserv and automaker Maruti Suzuki were the top percentage losers on the Nifty 50, falling more than 1% each.
(Reporting by Nallur Sethuraman, Rama Venkat in Bengaluru; additional reporting by Gaurav Dogra; editing by Uttaresh.V and Krishna Chandra Eluri)