BENGALURU, June 30 Reuters Indian shares on Thursday ended lower and clocked their worst quarter since the early days of the pandemic, beset by fears that aggressive central bank policy aimed at curbing inflation could hurt the economy.

The NSE Nifty 50 index closed 0.12 lower at 15,780.25, and the SP BSE Sensex slipped 0.02 to 53,018.94. The rupee ended at a record closing low of 78.9675 against the dollar.

The indexes fell around 9.5 each in the quarter, their worst performance since the March quarter of 2020. Foreign investors sold Indian equities worth 13.81 billion in the quarter till June 29, the biggest outflow since at least 2008.

The Nifty Smallcap 100 and the Nifty Midcap 100 lost 19.1 and 10.9, respectively, in the quarter.

The Reserve Bank of India has hiked interest rates twice in the quarter once out of cycle. More hikes are expected with inflation above the central bank39;s tolerance band for a fifth straight month in May, as crude oil and commodity prices surged following the Ukraine conflict.

As seen in past interest rate cycles, we may see markets take 68 months to stabilise from their first rate hike, and one year to gain back all their losses, said Gaurav Dua, head of capital market strategy at Sharekhan, adding that small cap stocks could see an extended period of pain.

The next quarter won39;t be easy, we will likely see companies report the full effect of input cost pressures in their earnings.

The Nifty Metal subindex was the worst…