Sensex drags lower by 127 points, metals and banking stocks top losers

Fresh trade war fears and profit-booking by traders led equity indices to fall on Tuesday amid expectations of another interest rate cut by the Reserve Bank of India (RBI) later this week.

A day earlier, US President Donald Trump said that he will reinstate tariffs on US steel and aluminium imports from Brazil and Argentina.

The BSE S & P Sensex closed 127 points lower to 40,675 while the Nifty 50 was down by 54 points at 11,994. Except for Nifty IT and realty, all sectoral indices at the National Stock Exchange were in the red.

Nifty PSU bank fell by as much as 2.8 per cent, metal by 2.6 per cent, media by 2.3 per cent and pharma by 1 per cent.

Among stocks, Yes Bank tumbled by 7.57 per cent to close at Rs 59.20 per share as analysts questioned the quality of potential suitors who have promised to invest a total of two billion dollars. IndusInd Bank too slipped by 2.2 per cent to close at Rs 1,542.15 per share.

Metal stocks took a beating with Tata Steel dipping by 5.2 per cent, JSW Steel by 3.7 per cent and Vedanta by 3.1 per cent. Bharti Infratel, Adani Ports, Zee Entertainment, Grasim and GAIL too closed in the negative zone.

However, Bajaj Auto gained by 3.1 per cent while IT major Tata Consultancy Services and Infosys witnessed marginal uptick.

Meanwhile, Asian shares tumbled on Tuesday after US President Donald Trump said he will impose tariffs against imports from Brazil and Argentina, recharging fears about global trade tensions. He said the countries were indulged in the devaluation of their currencies which was hurting US farmers.

Japan's Nikkei shed 0.64 per cent, Hong Kong's Hang Seng lost by 0.2 per cent and South Korea's Kospi slipped by 0.38 per cent.