BSE Sensex edged lower on Tuesday, backing away slightly from near three-year highs hit in the previous session, as Hero MotoCorp shares fell a day ahead of its quarterly earnings, while caution prevailed ahead of a key US monthly jobs report. Among the top gainers are Tata Power shares.
The US non-farm payrolls report later in the day may help calibrate bets on when the Federal Reserve would start the expected tapering of its monetary stimulus.
Still, sentiment remains buoyed as foreign institutional investors (FIIs) continue to purchase Indian shares, remaining net buyers for a twelfth consecutive session on Monday for a combined total of 103.1 billion rupees ($1.68 billion), according to regulatory and exchange data show.
"Earnings from better business except pharmaceuticals are out, so expect some short-term correction given recent gains" said Paras Adenwala, managing director and principal portfolio manager at Capital Portfolio Advisors.
The benchmark BSE Sensex index edged down 0.14 percent, or 28.92 points, to end at 20,864.97 after hitting its highest level since November 2010 on Monday.
The broader NSE Nifty index drifted down 0.03 percent, or 2.15 points, to end at 6,202.80.
Hero MotoCorp fell 1.6 percent ahead of its July-September earnings due on Wednesday.
Hero MotoCorp may miss the consensus operating profit forecast for the July-September quarter, according to data.
Reliance Industries (RIL) shares fell 1 percent on profit-taking after rising more than 5 percent in the last three consecutive sessions until Monday.
Wockhardt Ltd shares fell 4 percent after Britain's drug regulator revoked the quality compliance certificate for one of its factory in India, the drugmaker said on Tuesday, the third of its plants to be hit by export restrictions this year.
Karnataka Bank Ltd shares fell 5 percent after its September quarter profit plunged 75 percent to 289.5 million rupees.
However among stocks that gained, Yes Bank Ltd rose 3.7 percent after its net profit rose 21.2 percent to 3.71 billion rupees, beating analysts' estimates.
Indian sugar companies rallied after global raw sugar futures spiked to a one-year high after a fire engulfed four warehouses in Brazil's Santos port, jeopardizing a fifth of monthly exports from the top producer's main terminal.
Wipro rose 1.7 percent ahead of its July-September earnings later in the day.
FACTORS TO WATCH
* Dollar holds near lows before U.S. jobs data
* U.S. oil hits 3-1/2-mth low below $99 on stock build
* Dollar inches higher ahead of U.S. jobs data
* Foreign institutional investor flows