BENGALURU, Dec 20 (Reuters) - Indian shares declined on Tuesday, dragged by broad-based losses across sectors on fears of a recession in the U.S. and a surge in COVID-19 cases in China, which has offset optimism over loosening strict pandemic restrictions.

The Nifty 50 index was down 0.99% at 18,237.40, as of 10:50 a.m. IST, and the S&P BSE Sensex fell 0.95% to 61,217.52.

Barring Adani Enterprises, Axis Bank, Ultratech Cement and Hero MotoCorp, all the other 46 constituents in Nifty 50 logged losses.

All the major sectoral indices declined with auto , FMCG, information technology and metal stocks shedding over 1%.

"Markets are fearing that recession is going to be extremely strong in the U.S. and Europe," said Avinash Gorakshakar, head of research at Profitmart Securities. Sectors linked to export markets like "I.T. and metals are likely to face the heat," he added.

Analysts also added that U.S. macroeconomic data due later this week, commentary from Federal Reserve officials and the uncertainty over demand revival in China could hurt Indian markets in the very near term.

Asian markets fell sharply today after the Bank of Japan's (BOJ) decision to allow long-term interest rates to rise further soured sentiment. It added to concerns after China's decade-low business confidence data and the recent rise in COVID-19 infections. The MSCI Asia ex Japan declined 1.75%.

The Indian rupee weakened 0.10% versus the U.S. dollar, quoting at 82.78 per dollar on poor risk appetite and higher U.S. yields, following the hawkish BOJ policy outcome, while Wall Street equities extended losses overnight.

Among individual stocks, Dabur India fell over 2.5% on a report that its promoters are planning to sell shares worth 8 billion rupees ($96.71 million).

Airlines' stocks such as SpiceJet and InterGlobe Aviation rose marginally in a weak market after domestic air traffic rose 11% in November, according to data released by Directorate General of Civil Aviation. ($1 = 82.7200 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman)