The Nifty 50 fell 0.26% to 17,660.15, while the S&P BSE Sensex closed 0.31% lower to 59,727.01.
The Nifty had snapped a nine-day winning streak in the previous session and formed a bearish engulfing pattern, suggesting bearish bias. Five of the 13 major sectoral indexes declined on Tuesday, with high-weightage financials shedding over 0.3%
Information technology stocks, which led the correction on Monday, added 0.59%. Valuations in the sector are attractive for long-term investors after the recent correction, said two analysts, even as they flagged near-term headwinds due to a slowdown in the banking, finance, services and insurance (BFSI) segment in the U.S. and Europe. Weak earnings from TCS and Infosys and commentary on concerns over tech spending in the U.S. and Europe have piled the pressure on IT stocks, they said. The IT index had sunk to a six-month low on Monday, dragged by a 9% fall in Infosys. It is down over 5% in 2023 so far after losing 26% in 2022, weighed by the onset of a global rate hike cycle. Lupin rose over 6% after global brokerage Investec closed its "Fast Sell" rating citing potential gains from U.S. markets. The stock was among the top gainers in pharma , which rose over 1.5%. Analysts expect the benchmark Nifty 50 to witness consolidation in the near term.
"Managing risk holds the key," said Ajit Mishra, vice president of technical research at Religare Broking, citing an uptick in volatility during the earnings season. Angel One gained nearly 2% after posting a 30% jump in March-quarter profit, led by a surge in orders. DLF rose to a fresh 52-week high on multiple block deals.
($1 = 81.9610 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil and Nivedita Bhattacharjee)
