Sensex drops over 100 points in early trade; Nifty slips below 18,100

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Equity benchmark Sensex fell over 100 points in early trade on Tuesday tracking losses in index majors Reliance Industries, HDFC twins and Kotak Bank despite a largely positive trend in global markets.

The 30-share index was trading 122.35 points or 0.20 per cent lower at 60,596.36 in initial deals. Similarly, the Nifty fell 45.45 points or 0.25 per cent to 18,064.

HDFC was the top loser in the Sensex pack, shedding over 1 per cent, followed by Kotak Bank, Asian Paints, Kotak Bank, Reliance Industries and PowerGrid. On the other hand, Tata Steel, M&M, Bajaj Finserv, Maruti, Nestle India and Tech Mahindra were among the gainers.

In the previous session, Sensex settled 32.02 points or 0.05 per cent higher at 60,718.71. Similarly, the Nifty rose 6.70 points or 0.04 per cent to 18,109.45. Foreign institutional investors (FIIs) were net buyers in the capital market, as they purchased shares worth Rs 424.74 crore on Monday, as per exchange data.

"Market direction is likely to be influenced largely by global developments, particularly the market's response to rising inflation. US and European markets shrugging off the high US inflation rate of 6.2 per cent is very significant and this is likely to impart resilience to global equity markets in the short-term even while there is concern about elevated valuations in stock prices," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Back home in India, the RBI has again cautioned that stock prices in India are much higher judged by the traditional parameters of valuation. But the central bank is optimistic about the growth recovery underway in the Indian economy, he noted.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with gains in mid-session deals. Stock exchanges in the US ended marginally lower in the overnight session.

Meanwhile, international oil benchmark Brent crude rose 0.89 per cent to USD 82.78 per barrel.