Indian shares gave up early gains to inch lower on Tuesday, hurt by losses in infrastructure stocks and high-flying automakers, while investors awaited earnings from heavyweight Bajaj Finance due later in the day.
The NSE Nifty 50 index fell 0.47% to 18,221.25 by 0446 GMT, while the S&P BSE Sensex slipped 0.4% to 61,061.39, after touching near three-month highs earlier in the session.
"Stocks moved up quite sharply from recent lows, so there is some element of caution in the market, especially in the run-up to the federal budget," said Mayuresh Joshi, head of equity research at William O'Neil & Co in India.
The Nifty and Sensex are off to a flying start this year and have gained nearly 12% from lows hit in December, on jumps in auto and energy stocks despite a spike in COVID-19 cases. The indexes are around 2% shy of record highs touched in October.
"Investors will take cues from the results season which has been good so far, but there are also a lot of global headwinds right now. Inflationary pressures and supply chain constraints are very evident globally."
On Tuesday, auto stocks dipped 1.5% after seeing hefty gains in the previous session.
The Nifty Infrastructure index slid 1%. Major cement producer UltraTech Cement dropped 2.7% after a sharp spike in the previous session following results.
Nifty 50 component Bajaj Finance is due to report third-quarter results on Tuesday. The shadow lender will also consider raising funds by issuing debt. Its shares gave up early gains to trade flat by 0446 GMT.
Meanwhile, real-estate developer Prestige Estates Projects hit an all-time high after reporting record quarterly sales, while IT services provider Sonata Software jumped 6.2% on a surge in profit.
