BENGALURU, Oct 10 (Reuters) - Indian shares fell to their lowest level in a week on Monday, led by automobile and consumer stocks, and as Asian equities slipped after a strong U.S. jobs report strengthened the case for the Federal Reserve to persist with aggressive rate hikes.

The NSE Nifty 50 index, with all of its major sub-indexes in the negative territory, fell 1.4% to 17,072.90 as of 0442 GMT, and the S&P BSE Sensex declined 1.37% to 57,396.53. Both the indexes posted their sharpest intraday drop in two weeks.

"The paradoxical construct of good economic news turning out to be bad news for markets played out again last Friday in the U.S. The surprisingly low U.S. unemployment rate implies that the Fed will have to continue raising interest rates longer than the markets had discounted," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

In morning trading, the Nifty's auto index and the fast-moving consumer goods index were among the worst performers among other sub-indexes, falling 1.64% and 1.8%, respectively. Tata Motors Ltd and Hero MotoCorp were the top losers on the Nifty 50, declining 3.8% and 2.8%, respectively.

Domestic corporate earnings will be among the drivers for markets in the next few weeks, with IT service provider Tata Consultancy Services set to kick off earnings season on Monday, when it reports quarterly results later in the day.

Tata Consultancy Services, rising 0.6%, was among the two gainers on the Nifty IT index which was down 0.48%.

IDBI Bank jumped as much as 11.2% after the government said on Friday it was looking to sell a 60.72% stake in the bank and invited expressions of interest.

A Reuters poll found India's retail inflation accelerated to a five month high of 7.30% in September due to surging food prices, staying above the Reserve Bank of India's tolerance band for a ninth month. The data is due after market hours on Wednesday. ($1 = 82.8200 Indian rupees) (Reporting by Rama Venkat in Bengaluru; Editing by Neha Arora and Dhanya Ann Thoppil)