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India's benchmark Nifty 50 index is set to open lower on Thursday, as the latest U.S. data dampened expectations of a rate cut as early as March, while HDFC Bank's U.S.-listed shares slid overnight, hinting at continued selling pressure.

India's GIFT Nifty was trading at 21,404 as of 8:18 a.m. IST, suggesting the NSE Nifty 50 will open below its Wednesday close of 21,571.95.

India's blue-chip indexes Nifty 50 and Sensex posted their worst session in 19 months on Wednesday, led by an 8.44% decline in top private lender and heaviest weighted stock HDFC Bank, on worries over its stagnant margins.

The bank's U.S.-listed shares shed 9.14% overnight extending its post-earnings decline to the second session, and added to worries of further slide.

Wall Street equities closed lower overnight after strong retail sales data for December dampened early rate cut expectations.

The odds of a 25 basis points rate cut in March stood at 59.6%, down from 63.1% a day ago, according to CME's FedWatch tool.

Asian markets were muted, following a 2.3% drop on Wednesday after China's economic growth in the December quarter missed expectations. [MKTS/GLOB]

The results of Nifty 50 constituents, including IndusInd Bank, Reliance Industries, Hindustan Unilever and Ultratech Cement, due on Thursday and Friday, are now on investors' radar.

Foreign institutional investors sold Indian shares worth a net 105.78 billion rupees ($1.27 billion) on Wednesday, while domestic institutional investors bought shares worth 40.06 billion rupees.

STOCKS TO WATCH:

** Mahindra & Mahindra: Company's unit signed contract to manufacture and deliver metallic components for all Airbus commercial aircraft models.

** NHPC: Indian government will sell up to 3.5% stake in the company through an offer for sale, at a floor price of 66 rupees per share, a discount of 10% on closing price on Wednesday.

** Asian Paints: Top paint maker reported better-than-expected rise in December quarter profit on strong decorative business.

** LTIMindtree: IT company posted smaller-than-expected profit in the third quarter on weak demand, furloughs.

($1 = 83.1360 Indian rupees)