BENGALURU: Indian shares fell on Thursday, dragged by broad-based declines, as a surge in COVID cases in China dampened optimism generated by the reopening of the world's second-largest economy.

The Nifty 50 index was down 0.58% at 18,017.85, as of 11:27 a.m. IST, and the S&P BSE Sensex fell 0.54% to 60,578.03.

All the major sectoral indexes declined, with financials , auto, fast moving consumer goods , and oil and gas shedding over 0.75%.

Forty-five of the Nifty 50 constituents fell, with Tata Consumer, Tata Motors, Grasim, Ultratech Cement, HDFC and Hindalco Industries losing over 1.25%.

"The dullness in the market is not only due to expiry volatility, but also inflation worries in the U.S., rise in COVID-19 cases in China and rise in crude oil prices over the last few sessions," said Neeraj Dewan, director at Quantum Securities.

Analysts expect the volumes to be thin and the market to be volatile till next week, with the earnings season for the December-quarter being the next major trigger.

Traders will settle their futures and options contracts as the December derivatives series, the last one of 2022, expires today.

Wall Street equities closed lower overnight after investors assessed the U.S. Federal Reserve's rate hike path on mixed economic data released earlier in the week and concerns over a surge in COVID-19 cases in China.

Several countries, including the United States and India, have made COVID tests mandatory for travellers from China.

In the wider markets, the MSCI Asia ex-Japan index fell 0.90%, while Brent was down 0.5% after jumping to a three-week high earlier in the week.

Among individual domestic stocks, Dr Reddy's Laboratories bucked the trend in the market and rose over 2%, after all litigations against it were dropped in an anti-trust case in the United States. The stock was the top gainer in Nifty 50 index. ($1 = 82.7360 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Eileen Soreng)