BENGALURU, Jan 30 Reuters Indian shares fell on Tuesday, following a sharp surge in the previous session, weighed down by financials after Bajaj Finance39;s asset quality worsened in the December quarter.

The bluechip NSE Nifty 50 index was down 0.16 at 21,702.60 points and the SP BSE Sensex fell 0.29 to 71,731.20, as of 1104 a.m. IST.

Unsustainable valuations and cooling off in earnings across segments remain worrisome for the market, said Dipan Mehta, founder and director at Elixir Equities.

Post key events like India39;s budget and Fed policy this week, we see scope for correction, timecorrection or pricecorrection, Mehta added.

The Indian government is due to announce the federal budget on Thursday.

The highest weighted of the 13 major sectors, financial services dropped 0.5.

Bajaj Finance lost about 5 to hit a fivemonth low and was the top Nifty 50 loser. The company posted a smallerthanexpected rise in quarterly profit, while its asset quality deteriorated.

Given the asset quality deterioration, credit cost is likely to remain elevated in the near term, said analysts at Ambit Capital.

Information technology stocks added 0.85 ahead of U.S. Federal Reserve rate decision and commentary, due on Wednesday.

The Fed commentary will provide cues into rate trajectory, and influence U.S. Treasury yields and foreign investor strategy.

Oil and gas index gained 1.5, led by 3 rise Bharat Petroleum Corporation.

The staterun oil marketing company reported…