Indian shares drop on global cues, poised for weekly fall

* NSE index falls 0.54 pct, BSE index 0.53 pct lower

* Asian shares decline

* Sun Pharma is top pct loser

By Tanvi Mehta

May 4 (Reuters) - Indian shares dropped on Friday tracking global equity markets, while IT and pharma stocks pulled down the indexes, ahead of elections in key southern state of Karnataka.

Asian shares stepped back, while the dollar ran into some profit-taking after a strong week of gains as financial markets turned their attention to looming U.S. payrolls data for fresh catalysts. MKTS/GLOB

"Domestically, there is a scenario that markets have been overvalued, as well as political developments ahead of elections," said Dhananjay Sinha, head of institutional research, Emkay Global Financial Services, adding that global overhang also persisted.

The broader NSE index .NSEI was down 0.54 percent at 10,622, as of 614 GMT.

The benchmark BSE index .BSESN slipped 0.53 percent at 34,918.12.

Both indexes are set to end the week lower.

The Nifty IT index .NIFTYIT extended losses into a third consecutive session. The index had gained nearly 12 percent in the previous month on the back of a weaker rupee and strong earnings from IT majors.

Pharma stocks pushed both indexes lower, with the Nifty Pharma index .NIPHARM falling as much as 1 percent. Sun Pharmaceutical Industries Ltd SUN.NS slid up to 2.3 percent and was the top drag.

JSW Energy JSWE.NS , Castrol India Ltd CAST.NS and Hexaware Technologies Ltd HEXT.NS dropped after their March-quarter results failed to please investors.