BENGALURU: Indian shares slid on Wednesday dragged by losses in private sector banks as global investor mood soured over concerns of a potential pickup in US inflation, while domestic COVID-19 deaths crossed the quarter-million mark.

The NSE Nifty 50 index fell 1.04% to 14,696.50, while the S&P BSE Sensex slid 0.96% to 48,690.80.

Speculation that surging commodity prices and growing inflationary pressure in the United States could lead to earlier rate hikes and higher bond yields globally, sent Asian shares to two-month lows, although US Federal Reserve officials reiterated a firmly dovish policy stance.

In India, the central bank is seen maintaining status quo on interest rates as data expected later in the day is likely to show retail inflation eased to a three-month low in April. However, investors are concerned about potential outflows of foreign funds.

Adding to investor concerns, India reported a record surge in coronavirus deaths in the past 24 hours, pushing its overall death toll over a quarter million.

Moody's Investors Service warned on Tuesday that the second severe wave of coronavirus infections would slow near-term economic recovery, slashing its real GDP growth forecast to 9.3% from 13.7% for the fiscal year ending March 2022.

On Wednesday, private sector lenders were the top drag. The Nifty private bank index settled 1.6% lower and the Nifty Financial Services index closed down 1.23%.

Tata Steel snapped five straight sessions of gains to close 4.44% lower.

The pandemic continued to hammer sales for the auto sector. India's passenger vehicle sales slumped over 10% month on month, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

Still, the Nifty auto index closed up 0.19%.