BENGALURU, Aug 16 (Reuters) - Financial stocks led losses in Indian shares on Wednesday after a surge in domestic retail inflation triggered caution, adding to market jitters brought by worries about China's economic recovery.

The Nifty 50 index was down 0.32% at 19,372.60 while the S&P BSE Sensex fell 0.23% to 65,254.51 at 10:11 a.m. IST.

Eight of the 13 major sectoral indexes logged losses, with the financial, bank and private bank indexes falling between 0.8% and 1%.

The slide comes after data showed that domestic annual retail inflation rose to a 15-month high of 7.44% in July, predominantly due to rising vegetable and cereals prices.

Analysts said that surge in inflation would trigger caution in the near-term.

Information technology (IT) was the exception, rising 0.9% and capping the losses in the benchmarks, led by Infosys on a $1.64 billion deal with Liberty Global to scale digital platforms. The stock was the top Nifty 50 gainer.

Asian markets also fell, as investors turned more cautious about China's economic recovery a day after the country's central bank unexpectedly cut rates for the second time in three months.

"Deflation and demand slowdown in China coupled with concerns over more rate hikes in developed economics has taken the sheen out of equity markets," said Shrikant Chouhan, head of research (retail) at Kotak Securities.

Indian metal stocks fell 0.8% and was among top sectoral losers.

A sharp moderation in foreign inflows in August caused traders to limit exposure, analysts said. Foreign portfolio investors (FPIs) bought 7.37 billion rupees worth of shares in the first half of the month, lowest since February, according to National Securities Depository data.

Airline operator Interglobe Aviation lost as much as 4.59% on a report that the company's co-founder will likely sell shares worth $450 million via block deal on Wednesday.

Oil stocks like ONGC, Oil India, Mangalore Refinery and Chennai Petroleum lost between 0.5% and 4% after the government hiked windfall tax on crude.

(Reporting by Bharath Rajeswaran and Manvi Pant in Bengaluru; Editing by Varun H K, Sonia Cheema and Nivedita Bhattacharjee)