Indian shares ended flat for the third straight day on Tuesday as losses in pharma shares were offset by gains in FMCG stocks. The Sensex ended 33.29 points lower at 29,485.45 and the 51-share Nifty index settled at 9,121.50, down 5.35 points.
For most part of the day indices traded lower as lenders such as Axis Bank were hit by a Morgan Stanley downgrade while worries of regulatory action from the U.S. Food and Drug Administration triggered selling in drugmakers.
Analysts expect a period of consolidation ahead as investors focus on individual stock movements as they wait for the earnings season to start in mid-April.
"The markets have been trending up since December. I think this week market may just cool off," said Sacchidanand Uttekar, equity technical analyst at Motilal Oswal Securities.
"There will be profit booking in major index-contributing stocks including Reliance Industries."
The broader Nifty had closed at a record high last week.
Drug makers slumped on worries of regulatory action from the U.S. Food and Drug Administration.
Divi's Laboratories Ltd fell 20 per cent following an import alert issued by the USFDA on products manufactured at its Visakhapatnam unit. Dr Reddy's Lab, Auro Pharma and Sun Pharma also fell between 1-4.2 per cent.
Meanwhile, banks were among the other major losers after Morgan Stanley downgraded a slew of large Indian lenders, citing expectation of weak earnings. Axis Bank fell 2.89 per cent, Yes Bank lost 2.05 per cent while ICICI Bank closed 1.09 per cent lower.
However, a late buying in FMCG share like ITC erased most of the losses in the index. ITC shares closed 2.13 per cent higher at Rs 287.90.
Shares of Avenue Supermarts, which operates D-Mart malls, more than doubled in value on their trading debut. Analysts expect strong potential for its supermarkets and retail stores. D-Mart shares settled 114.6 per cent higher at Rs 641.6 compared to its issue price of Rs 299.
Bharti Infratel closed 1.51 per cent higher after Nettle Infra Investments bought about 21.63 per cent stake in co from promoter Bharti Airtel. (With agency inputs)
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