BENGALURU (Reuters) – Indian shares inched lower on Thursday as a recent rally on the back of easing domestic lockdowns led by institutional buying paused after a sober economic outlook from the U.S. Federal Reserve.

In a challenge to the recent optimism in global stock markets, the Fed predicted the U.S. economy would shrink 6.5% in 2020 and unemployment would still be at 9.3% at year’s end.

Asian shares eased on Thursday, while bonds rallied after the Fed’s outlook.

The NSE Nifty 50 index fell 0.40% to 10,075 by 0505 GMT, while the benchmark S&P BSE Sensex was down 0.35% at 34,126.21.

“Some sort of fatigue is coming in the global markets. Flows from the international markets have been driving the equity markets in India. These two things are not working in the last two days and that’s why we are seeing some bit of pause,” said Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai.

“India is at a bigger risk than other markets as the number of (coronavirus) cases are rising after lockdowns. If the cases spike in a big way we could see some more imposition of measures from the government, which could derail the entire recovery process,” he added.

India reopened shopping malls and restaurants earlier this week even as the number of cases continue to rise. As of Thursday, it jumped to 286,579, including 8,102 deaths.

The Nifty information technology index fell 0.6% and was a top drag on the Nifty 50 index along with Reliance Industries and HDFC Bank Ltd, which were down 1.1% and 1%, respectively.

IndusInd Bank Ltd with a 7% rise was the top gainer in the Nifty index.

Shares of Bharti Airtel rose 0.8%, while Vodafone Idea fell 2.3%, after CNBC-TV18 reported that the country’s Supreme Court will take up the case over telecom dues on Thursday. (bit.ly/30x9Xfs)