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Indian shares swung between gains and losses, before settling lower on Thursday as investors continued to fret over the likelihood that global central banks would have to keep raising interest rates to tackle inflation.

Volatility remained high with the expiration of the February derivatives series.

The Nifty 50 index closed 0.25% lower to 17,511.25, while the S&P BSE Sensex fell 0.23% to 59,605.80. Both the benchmarks traded in a range between 0.4% gains and 0.6% losses.

The volatility index settled at 15.08, hovering near a three-week high. Also known as the fear gauge, it had risen to 15.59 on Wednesday, highest since Feb. 2, the day after the union budget.

Twenty-six of the Nifty 50 stocks declined, with Asian Paints losing over 3% after Jefferies flagged demand-related concerns over demand after the recent price hikes.

Larsen & Toubro, Titan and Divi's Laboratories were among the other top losers.

A majority of the RBI's policy committee members reiterated that it would be premature to lower the guard against inflation.

"Only value stocks are likely to do well, in the near term," said Anita Gandhi, director at Arihant Capital Markets.

Analysts had anticipated high volatility in Thursday's session ahead of the February series derivatives expiry.

The U.S. Federal Reserve's latest minutes indicated that a majority of the members favoured smaller rate hikes in subsequent meetings.

However, markets declined as a slew of macroeconomic data since then have kept fears of an aggressive rate hike path intact.

Zee Entertainment tumbled nearly 4% after the National Company Law Tribunal admitted the company to corporate insolvency resolution process, in a petition filed by IndusInd Bank.

The media index fell 1.77% and was among the top sectoral losers.

Consumer major ITC rose to an all-time high as analysts hinted at a potential growth in volumes due to a stable tax regime.

($1 = 82.8010 Indian rupees)