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Indian shares declined on Tuesday, dragged by slide in financials, overlooking favourable domestic inflation data and persistent foreign institutional buying in equities.

The Nifty 50 closed 0.61% down to 18,286.50, while the S&P BSE Sensex fell 0.66% to 61,932.47.

Ten of the 13 major sectoral indexes declined with high weightage financials losing 0.74% and dragging the benchmark.

Housing Development Finance Corporation Ltd and HDFC Bank, which together have a weightage of nearly 16% in the Nifty 50 index lost 2.22% and 1.70%, respectively, listing among the top 50 losers.

Both the stocks traded ex-dividend on Tuesday when they had no entitlement to dividend payout.

Analysts expect the benchmark Nifty to consolidate in the near term with resistance seen at 18,400-18,500 levels.

"We maintain a positive outlook for domestic markets due to strong macroeconomic fundamentals," said G Chokkalingam, founder and head of research at Equinomics Research & Advisory.

India's annual wholesale price inflation and retail inflation cooled off in April, heightening expectations of a prolonged pause in interest rate hikes by the country's central bank.

Among individual stocks, Berger Paints Ltd fell nearly 3% after reporting a fall in fourth-quarter profit.

On the other hand, Oil and Natural Gas Corporation Ltd advanced 1.45% and was among the top gainers in Nifty 50 index.

The gain comes after the government cut windfall tax on petroleum crude to zero from 4,100 rupees per tonne, in its fortnightly revision.

The Nifty 50 has risen over 5% so far this fiscal year. The recent uptick could be attributed to the return of foreign institutional investors (FII). FIIs have bought over 210 billion rupees of shares in the past 13 sessions at a stretch, the longest FII buying streak in nine months.

($1 = 81.7800 Indian rupees)