India's benchmark indexes fell on Tuesday, dragged by financials, auto and information technology stocks, as selling pressure emerged at near record high levels.
The blue-chip NSE Nifty 50 fell 0.35% to 21,665.80 points, while the S&P BSE Sensex shed 0.53% to 71,892.48.
"We expect selling pressure at near record high levels to continue ahead of the earnings season next week," said Anita Gandhi, founder and head of institution at Arihant Capital
While the undertone remains positive, the markets will need proof of earnings to justify the rich valuations and sustain the ongoing rally, Gandhi added..
The Nifty gained about 20% in 2023, with more than half of it in the final two months, aided by faster-than-expected quarterly growth, elevated bets of U.S. rate cuts in the first half of 2024, and steady retail participation.
On the day, IT stocks lost 1.16%, while financials shed 0.52%. The two sub-indexes, which account for 49% of the Nifty, had gained about 16% and 12%, respectively, in the final two months of 2023.
Auto stocks dropped 1.37% and was the top sectoral loser.
Eicher Motors extended decline, losing 3.61%, as a tax penalty notice and a fall in December motorcycle sales continued to weigh.
Mahindra and Mahindra lost 2.77%, after the company attributed the decline in tractor dispatches in December to the tapering of agricultural activities in the month and flagged supply challenges.
On the flip side, the pharma index rose 2.46%, hitting a new record high.
Drug maker Lupin jumped 6.21% after Nomura raised its price target to a Street high.
Adani Ports and Special Economic Zone gained 2.92% after the company raised its fiscal 2024 cargo volume forecast.
Coal India added 2.84% after reporting a 8.2% year-on-year increase in coal production in December.
