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Indian shares fell on Monday after U.S. export prices data last week stoked fresh fears that the Federal Reserve would keep interest rates higher for longer, while investors waited for minutes of the Fed's meeting due on Wednesday.

The Nifty 50 index closed 0.56% lower at 17,844.60, while the S&P BSE Sensex fell 0.51% at 60,691.54.

The benchmarks struggled for direction in the first half of the day, before settling lower to extend losses for a second straight session.

"Inflation remains the number one risk to global markets," said Pramod Gubbi, co-founder of Marcellus Investment Managers.

Eleven of the 13 major sectoral indexes fell with heavyweight financials losing nearly 1% and pharma index shedding 0.81%.

Cipla, the second-highest weighted stock in the pharma index, tumbled over 6% to a near-seven-month low after the company's Pithampur unit received eight observations from the U.S. drug regulator after inspection.

The top two stocks in Nifty 50 in terms of weightage - Reliance Industries and HDFC Bank fell nearly 1% each and led the slide in the benchmark.

Information technology stocks rose over 0.5%, with nine of the 10 constituents gaining on Monday.

The recent correction in IT stocks have made their valuations attractive, and long-term investors are increasing allocations to utilise the opportunity, three analysts said.

Since the start of 2022, the IT index has lost nearly 20% compared to 3% rise in the Nifty 50 index.

The ongoing concerns over the future rate-hiking path in the U.S. remained an overhang after official data showed a rise in export prices in January.

Investors await the minutes of the Fed's meeting, due on Wednesday, to assess the U.S. central bank's future rate hiking path. U.S. markets are closed on Monday for Presidents' Day.