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Indian shares extended losses and are on course to post their worst week in more than eight months on fears of aggressive interest rate hikes by global central banks and a fall in liquidity.

The Nifty 50 index fell 0.35% to 17,449.65, while the S&P BSE Sensex edged 0.31% lower to 59,428.62 as of 2:08 p.m. IST.

Both benchmarks have fallen over 2.5% so far this week, on course to register their worst week since June 17, 2022.

"The persistent selling by foreign institutional investors (FIIs) means that liquidity is going away from markets. Without liquidity and positive triggers, markets are not going to rise in a hurry," said Avinash Gorakshakar, head of research at Profitmart Securities.

FIIs have remained net sellers in Indian equities in 2023 so far, offloading 48.06 billion rupees ($580.56 million)in the first half of February and 288.52 billion rupees in January.

Nine of the 13 sectoral indexes declined. Metal stocks tumbled nearly 3% with 14 of the 15 constituents logging losses.

"Metals are under pressure due to a rise in the dollar index as commodities have an inverse proportionality to the dollar," said Astha Jain, senior research analyst at Hem Securities.

The dollar index, which measures the safe-haven greenback against six peers, hovered near a two-month high of 104.78.

Wall Street equities ended positively, with the S&P 500 snapping a four-session losing streak, even as weekly jobs data heightened chances of the Federal Reserve continuing with its tight monetary policy stance.

Among individual stocks, Adani Enterprises fell nearly 6% and was the top Nifty 50 loser. "Investors are unwilling to touch Adani group stocks as there is no surety that the companies will bounce back," Gorakshakar said.

Hindalco, JSW Steel, Tata Steel were among the other top losers.

($1 = 82.7825 Indian rupees)