Sensex, Nifty edge lower as financials, autos weigh

 Indian shares slipped on Tuesday as investors locked in profits after a five-day rally, while losses in financials and auto stocks dented sentiment.

Asian shares and U.S. stock futures slipped as pessimism about world growth drove investors away from risky assets, with the MSCI’s broadest index of Asia-Pacific shares ex-Japan falling 0.5 percent.

Tracking the fall in Asian peers, the broader Nifty fell 0.62 percent to 10,893.65, while the benchmark Sensex was down 0.56 percent at 36,372.14, as of 0615 GMT.

“While the IT, energy, and private bank majors have delivered good results in what was a particularly challenging quarter, the broader market breadth looks weak,” said Sunil Sharma, chief investment officer, Sanctum Wealth Management.

“The strongest companies are moving to higher levels and that’s good for the market. However, the broader market remains lacklustre and the story remains centered around a subset set of large caps driving the index,” Sharma added.

Adding to the air of caution and uncertainty, the International Monetary Fund (IMF) trimmed its global growth forecasts and a survey showed increasing pessimism among business chiefs as trade tensions loomed.

The gloomy IMF forecasts, released on the eve of the World Economic Forum in Davos, Switzerland, highlighted the challenges facing policymakers as they tackle an array of current or potential crises, from the U.S.-China trade war to Brexit.

On the Nifty, Housing Development Finance Corp Ltd dropped as much as 1.7 percent, while HDFC Bank Ltd declined up to 0.9 percent.

Mahindra and Mahindra Ltd dropped 3.1 percent to a six-week low, while Maruti Suzuki India Ltd slipped up to 2 percent, dragging the Nifty Auto Index to its lowest since Oct. 29, 2018.

Meanwhile, Kotak Mahindra Bank Ltd, India’s fifth-biggest lender by market capitalisation, rose up to 3.2 percent to its highest since Dec. 7, 2018 after reporting upbeat third-quarter results.

Top Indian drugmaker Sun Pharmaceutical Industries Ltd surged 5.8 percent after it said it will make its unit the new distributor for its domestic formulations business, replacing Aditya Medisales Ltd.

Prabhat Dairy Ltd surged as much as 20 percent in its sharpest intraday gain since Aug. 2016 after it said it will sell its dairy business to French firm Groupe Lactalis for 17 billion rupees ($ 238.43 million).