Recent data from the United States has heightened inflation concerns, sparking fears of a prolonged higher interest-rate regime in the world's largest economy. Minutes from the Fed's latest policy meeting is due on Wednesday.
Among Indian equities, metal stocks were top sectoral gainers, rising 0.9% as global metal prices rose. The index is down over 13% so far this year as weaker demand outlook weighed on metal prices.
Brokerage firm JP Morgan said in a note it continued to see attractive risk-reward for Indian metal firms. "With the kind of domestic, as well as global economic data coming in, we might see a selling in growth stocks and buying in value stocks," said Saurabh Jain, assistant vice-president, research, SMC Global Securities. Jain also said heavyweight IT stocks - , up 8.7% so far this year - were likely to be losing steam, while investors are expected to buy more financial shares.
IT stocks were trading down 0.3% on Tuesday morning. Bank stocks and financial stocks , which have lost 4.9% and 3.9%, so far this year respectively, were up 0.4% and 0.5%.
Meanwhile, Asian markets declined, with the MSCI's broadest index of Asia-Pacific shares outside Japan dropping 0.7%. Among individual stocks, shares of flexible packaging products manufacturer UFlex dropped as much as 4.3% on reports of search operation by the country's income tax department. (Reporting by Bharath Rajeswaran and Nallur Sethuraman in Bengaluru; Editing by Dhanya Ann Thoppil and Nivedita Bhattacharjee)
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