Sensex pares early gains to slump for 2nd straight day; Nifty below 17,700

Indian shares reversed early gains and closed in the red for the second straight day on Tuesday, dragged by index heavyweight Reliance, ICICI Bank and HDFC Bank.

The 30-share BSE benchmark Sensex declined 184 points or 0.31% to settle at 59,727. The broader NSE Nifty dropped 47 points or 0.26% to end at 17,660.

From the Sensex pack, Power Grid, UltraTech Cement, Titan and Reliance were the top laggards, falling about 1-2.5%. Bajaj Finance, M&M, ICICI Bank and TCS were the other laggards. Whereas, HCL Tech, IndusInd Bank, Nestle, Wipro and Sun Pharma closed with gains.

Shares of smallcap firm Precision Camshafts closed over 7% higher after an ace investor picked up a 1.05% stake in the firm in March quarter. Jubilant Foodworks also closed 2% higher as the company's stake in Hashtag Loyalty diluted after Coca-Cola bought a 15% stake in the latter for Rs 1.05 billion.

On the sectoral front, Nifty Pharma advanced 1.64% and Nifty PSU Bank rose 0.76%. On the other hand, the financial, FMCG, media, consumer durables and oil & gas sectors closed in the red. In the broader market, Nifty Midcap50 surged 0.83% and Smallcap50 rose 0.61%.

Global Markets
Asian markets mostly fell Tuesday, even as data showed China's economy grew far more than expected in the first quarter after activity resumed following three years of painful zero-Covid measures. China's economy grew 4.5% year-on-year for the first quarter, eclipsing the expectations of most economists.

Hong Kong's Hang Seng Index fell 0.63%, dragged lower by consumer and technology stocks. Japan's Nikkei stock index was the standout performer in the region as it rose 0.51%, while South Korea's Kospi fell 0.19%.

European stocks held near a 14-month high on Tuesday, following better-than-expected Chinese economic data, while Sterling rose after wage growth numbers also exceeded forecasts and supported expectations for a further Bank of England rate rise. Europe's broad STOXX 600 index rose 0.3%, trading just shy of its highest level since Feb 2022 hit a day earlier.

Experts View
"The banking stocks pared the performance during the day while the market was grappling with the sell-off in the IT sector. However, the IT sector experienced a marginal relief rally, aided by bottom fishing, as the recent correction has made the sector attractive for long-term investment," said Vinod Nair, Head of Research at Geojit Financial Services.

The pharma sector also bucked the negative trend due to an improvement in outlook along with strong movements in mid- and small-cap stocks, Nair added.

Rupee Weakens
The Indian rupee eased against the dollar on Tuesday as Treasury yields rose on increasing bets of a Federal Reserve rate hike following more robust US data. The rupee finished at 82.04 per dollar, compared with 81.9725 in the previous session.

Brent crude falls
Oil fell for a second day on Tuesday as upbeat Chinese economic data failed to deflect the focus from a possible increase to US interest rates and wider concern about the growth outlook.

Crude prices were also pressured by the Iraq federal government and Kurdistan Regional Government (KRG) taking a step towards a resumption in northern oil exports from the Turkish port of Ceyhan after they were halted last month. Brent crude fell 28 cents, or 0.3%, to $84.48 a barrel, giving up early gains. US West Texas Intermediate lost 30 cents, or 0.4%, to $80.53.

(With inputs from agencies)