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Indian shares declined on Wednesday, dragged by a broad sectoral slide after weak economic data from the United States, the euro zone and China triggered caution across global equities.

The Nifty 50 index settled 1.05% lower at 19,526.55, while the S&P BSE Sensex shed 1.02% to 65,782.78.

Asian and European peers also declined after a weak close in Wall Street overnight on rate concerns due to tightness in the U.S. labour market.

Fitch's downgrade of U.S. long-term debt rating due to fiscal concerns and weak factory activity data from China and the euro zone further weighed on investor sentiment. [MKTS/GLOB]

"Markets are ripe for consolidation till the second half of fiscal 2024 and the Fitch's downgrade has dampened sentiment," said Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers.

All the 13 major sectoral indexes logged losses, with high-weightage financials and IT shedding 1.28% and 0.81%, respectively.

The weakness spilled over to the broader markets as well, with the domestically linked smallcap index and midcaps losing 1.58% and 1.33%.

"Domestic macro fundamentals remain strong, as seen from July goods and services tax collection figures, but there are no triggers for a major upside in the near term due to elevated valuations," said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.

Metals fell 2.02% and was among the top sectoral losers. Analysts at Motilal Oswal Financial Services said the metal sector has been a major drag in the June-quarter results season so far.

Among individual stocks, two-wheeler maker Hero MotoCorp extended its decline, losing 6.56% in two days after India's financial crime-fighting agency searched the residence of its chairman Pawan Munjal on Tuesday.

Winemaker Sula Vineyards lost 8.12% after receiving an excise duty notice from the Maharashtra government.