Dec 9 (Reuters) - Indian benchmark shares extended losses on Tuesday, after their steepest drop in more than two months in the previous session, as uncertainty over a U.S. trade deal and caution ahead of the U.S. rate decision piled on to weak sentiment.

The Nifty 50 fell 0.58% to 25,810.82 and the BSE Sensex lost 0.55% to 84,629.69, respectively, as of 10:22 a.m. IST.

Fifteen of the 16 major sectors logged losses. The broader small-caps and mid-caps shed 0.5% each.

Between the lack of progress on the U.S.-India trade deal and investors' caution ahead of the Federal Reserve's decision on Wednesday, in which it is expected to reduce rates, foreign outflows have soared.

Foreign portfolio offloaded shares worth $1.32 billion in six sessions this month, thrice that of $425 million outflows in November.

"Domestic markets stayed under pressure as investors booked profits ahead of the Fed's decision and commentary, pivotal for foreign flows into Indian equities. The delay in the India-U.S. trade deal is adding to the drag on sentiment," said Kranthi Bathini, director of equity strategy at Wealthmills Securities.

U.S. Treasury Secretary Scott Bessent said Washington was still working toward a deal, with Deputy U.S. Trade Representative Rick Switzer also expected to visit India on December 10-11.

This comes even as reports say the U.S. has signalled plans to impose tariffs on rice imported from India. Rice exporters such as KRBL, Chaman Lal Setia, LT Foods and Kohinoor Foods lost between 1% and 8%.

Meanwhile, Wall Street banks have pencilled in fewer Fed reductions for 2026 amid lingering inflation concerns and expectations of a more resilient U.S. economy. [MKTS/GLOB]

IT companies, which earn a significant share of their revenue from the U.S., lost 1.5%. Metal and and auto indexes lost 0.7% each.

Newly listed education technology company Physicswallah rose 2% after reporting a 62% jump in consolidated quarterly profit.

Electronics manufacturer Kaynes Technology gained 3.5%, following a 30% slide over the past five sessions, after Macquarie and J.P. Morgan reiterated their positive view.

(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy and Janane Venkatraman)

By Bharath Rajeswaran and Vivek Kumar M