Indian shares fall on selling pressure at near record high levels

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 per cent to 21,665.80 points, while the S&P BSE Sensex shed 0.53 per cent 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 per cent 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 per cent, while financials shed 0.52 per cent. The two sub-indexes, which account for 49 per cent of the Nifty, had gained about 16 per cent and 12 per cent, respectively, in the final two months of 2023.

Auto stocks dropped 1.37 per cent and was the top sectoral loser.

Eicher Motors extended decline, losing 3.61 per cent, as a tax penalty notice and a fall in December motorcycle sales continued to weigh.

Mahindra and Mahindra lost 2.77 per cent, 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 per cent, hitting a new record high.

Drug maker Lupin jumped 6.21 per cent after Nomura raised its price target to a Street high.

Adani Ports and Special Economic Zone gained 2.92 per cent after the company raised its fiscal 2024 cargo volume forecast.

Coal India added 2.84 per cent after reporting a 8.2 per cent year-on-year increase in coal production in December.