India's benchmark equity indexes fell on Tuesday, contrasting a broadly positive global momentum, dragged by profit booking with analysts citing valuation concerns and global uncertainties as factors denting sentiment.
The NSE Nifty 50 index shed 0.26% to 23,992.55, while the S&P BSE Sensex settled 0.21% lower at 78,593.07.
The indexes had risen about 1.2% earlier in the day, following a global sell-off on Monday which also wiped out about $250 billion from Indian equities' market capitalization.
"What happened in Indian equities on Monday was an over-reaction, but our markets were due for a correction and will remain subdued as investors await clarity on U.S. economy and rate cut trajectory," said Avinash Gorakshakar, head of research at Profitmart Securities.
"There is frankly no major segment in Indian markets that is trading at favourable valuations which is also hurting buying interest," Gorakshakar said.
The decline in the Indian benchmarks was in stark contrast to a widely positive sentiment around the world, with most Asian markets closing higher.
The MSCI Asia ex-Japan index rose about 1% and U.S. stock index futures also recovered.
Domestically, high-weightage financials shed 1.07%, dragged by about 1% drop in top private lender HDFC Bank.
While heavyweights like HDFC Bank are useful for capital protection, they are not going to generate high returns in the near term, forcing some investors to book profits, two analysts said.
Information technology companies, which earn a significant share of their revenue from the U.S., gained 0.49%. They had dropped 3.26% on Monday.
Textile makers like Welspun Living, Trident, Gokaldas Exports, KPR Mill jumped 2.9%-15% amid political unrest in Bangladesh, with at least one analyst saying big brands may look to India as an alternative.
The broader, more domestically focussed small- and mid-caps fell about 0.4% and 0.6%, respectively.
