Indian shares surrendered earlier gains and closed lower for a second straight session on Tuesday, tracking subdued regional stock markets as weak China factory data rekindled global growth worries.
The broader NSE index fell 58.9 points or 0.75 per cent to 7,747, after rising as much as 1 per cent earlier in the session.
The benchmark BSE index dropped 207.27 points or 0.81 per cent to 25,229.70.
Barring realty, all other BSE sectoral indices ended in the red. Among them, IT index fell the most by 1.57 per cent, metal 1.34 per cent, PSU 1.22 per cent and oil & gas 1.04 per cent, while realty index was up 0.32 per cent.
Top five Sensex gainers were Bharti Airtel (+1.97%), Asian Paints (+1.02%), Adani Ports (+0.96%), HDFC (+0.62%) and Tata Motors (+0.54%), while the major losers were Coal India (-3.07%), BHEL (-2.58%), ICICI Bank (-2.47%), Lupin (-2.34%) and TCS (-1.78%).
Recent outperformers led the falls with Sun Pharmaceutical down 1.6 per cent after gaining 1.3 per cent in the previous two sessions, while Lupin dropped 2.3 per cent after rising nearly 3 per cent in the last three sessions.
Kotak Mahindra Bank fell 1.4 per cent after gaining 2.4 per cent in the last two sessions.
Coal India declined 3.1 per cent after the miner posted a 3.4 per cent drop in April coal output, while coal offtake was down 2.5 per cent.
Among the gainers, Tata Motors rose 0.54 per cent after the automaker posted a 10 per cent jump in April sales.
Aurobindo Pharma jumped 4.2 per cent after the US Food and Drug Administration approved its epilepsy prevention drug lacosamide.
Asian stocks erased earlier gains, while European shares opened lower on data showing China’s factories shrank for the 14th straight month in April.
Broader risk aversion also seeped into domestic stocks, with investors booking profits in recent outperformers such as Sun Pharmaceutical Industries Ltd and Kotak Mahindra Bank Ltd.
However, analysts remained optimistic about the health of the domestic economy after strong auto sales data for April and amid hopes of good monsoon rains.
“Good auto numbers are supporting sentiment and expectations are building up for demand picking up in the future after above-average monsoon forecast,” said K K Mital, head of portfolio management at Globe Capital Market.
A report by SMC Global said: "Asian stocks snapped a four-day losing streak as an overnight bounce in US shares boosted risk appetite while gold briefly popped to a one-year high on growing expectations of more policy stimulus. US stocks posted their biggest one-day advance in more than two weeks, putting the Dow industrials and S&P 500 within 2.3% of their records.The manufacturing sector in China remained in contraction in April, and at an accelerated pace, the latest survey from Caixin revealed on Tuesday with a Performance of Manufacturing Index score of 49.4. That missed forecasts for 49.8, and it was down from 49.7 in March. It also moved further beneath the boom-or-bust line of 50 that separates expansion from contraction. Among the individual components of the survey, output was little changed from the previous month, as total new orders stagnated and new export work fell for the fifth month in a row. Relatively weak market conditions and muted client demand contributed to a further solid decline in staff numbers."
European shares fell on Tuesday, with Commerzbank leading the market lower after a profit slump, while mining stocks weakened as they tracked a decline in metals prices.
Commerzbank shares fell 6.4 per cent after the German bank posted a 52 per cent drop in first-quarter net profit, hit by volatile capital markets and the drag on earnings from low interest rates.
Asian stocks erased earlier gains and the Japanese yen rallied to a fresh eighteen-month high on Tuesday as investors grew doubtful about global central banks’ ability to boost growth through aggressive policy easing.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat after being up as much as 0.4 per cent on the day and is now trading at a three-week low.