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Indian shares fell on Thursday, as HDFC Bank extended post-earnings decline, while IT stocks came under pressure amid growing doubts over early U.S. rate cuts.

The blue-chip NSE Nifty 50 shed 0.51% to 21,462.25, while the S&P BSE Sensex lost 0.44% to 71,186.86.

Both indexes have fallen about 3% each from the record high levels reached on Tuesday.

"We expect benchmarks to consolidate after the sharp sell-off on Wednesday (after HDFC Bank's results)," said Siddharth Khemka, head of retail research at Motilal Oswal Financial Services.

Financial services dropped 1%, as HDFC Bank lost 3.34%, extending losses from the worst session in over three years on Wednesday.

Banks would face immediate short-term pressure due to potential slowdown in earnings growth, and the anticipated easing of the rate cycle later in the year, said Seshadri Sen, head of research and strategist at Emkay Global Financial Services.

IT index fell 0.62%, with LTIMindtree dropping 10.72% after it reported a weaker-than-expected December-quarter profit and signalled a weak demand outlook.

Strong December U.S. retail sales data dampened early rate cut expectations, heightening pressure on IT companies that rely on the U.S. for a significant share of their revenue.

Among individual stocks, ICICI Prudential Life Insurance tumbled 5.58% following a slide in new business margins in the December quarter.

State-owned NHPC fell 2.6% after the government began the sale of up to a 3.5% stake in the power generator through an offer for sale, with the floor price set at 66 rupees, representing a nearly 10% discount to Wednesday's closing price.

Drug maker Sun Pharma climbed 2.83%, emerging as the top gainer on the Nifty 50, after announcing its intent to buy the remaining stake in the Israeli unit of Taro Pharmaceutical Industries for $347.8 million.