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 Indian shares fell on Thursday, weighed by auto and metal companies, as investors braced for crucial U.S. inflation data that will provide clues about the severity of the Federal Reserve's future interest rate hikes.

The NSE Nifty 50 index dropped 0.7% to 18,037 as of 0522 GMT, while the S&P BSE Sensex fell 0.70% to 60,609.

The U.S. consumer price index (CPI) data for October is due at 1330 GMT, with economists polled by Reuters forecasting a decline in both monthly and yearly core numbers to 0.5% and 6.5%, respectively.

"Markets have been rising, gearing up for a less aggressive rate hike from the Fed. But with a fractured U.S midterm election verdict and the inflation data due, we are seeing some corrections with markets getting ready for some surprises, " said Anand James, Chief Market Strategist at Geojit Financial Services.

The significant sell-off in crypto markets was also weighing on investors' overall mood, he added.

Asian share markets were tense on Thursday and the dollar held on to its overnight gains after Wall Street ended sharply lower on Wednesday as Republican gains in the midterm elections appeared more modest than some expected. [MKTS/GLOB]

Indian benchmark indexes hit an over-9-1/2 month peak on Wednesday, driven by the bank Nifty index touching a record high on the back of improved asset quality and credit growth for lenders. The bank index has gained about 17% so far this year, beating the benchmark Nifty index's 4% gain.

Meanwhile, the Nifty auto index fell 1.7%, led by a 5.5% drop in Tata Motors as core earnings failed to impress investors despite reporting a narrow quarterly loss on Wednesday.

The metals index was down 0.5%.

Shares of Axis Bank fell 2.7% after the Indian government proposed to sell a 1.55% stake in the private lender.