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Closing Bell: Sensex sheds 396 points, Nifty slips below 18,000; auto stocks jump

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The 50-scrip Nifty benchmark finished a choppy session just below the 18,000 mark as weakness in financial, consumer and pharma stocks pulled the headline indices lower, though gains in auto and IT scrips prevented deeper losses.  

Closing Bell: Sensex sheds 396 points, Nifty slips below 18,000; auto stocks jump
Indian equity benchmarks ended a choppy session sharply lower on Tuesday amid fag-end selling in financial and oil & gas shares. Weakness in consumer and pharmaceutical stocks also pulled the headline indices lower, though gains in automobile and IT securities prevented deeper losses.
The 30-scrip index ended 396.3 points or 0.7 percent lower at 60,322.4 and the broader Nifty50 benchmark settled at 17,999.2, down 110.3 points or 0.6 percent from its previous close.
Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Hero MotoCorp, Tech Mahindra, Eicher Motors and Wipro -- closing between 0.5 percent and 7.3 percent higher -- were among the top blue-chip gainers.
On the other hand, Shree Cement, Reliance Industries, Hindalco, SBI, Tata Consumer and UltraTech -- finishing between 2.3 percent and 3.2 percent lower -- were among the top laggards in the Nifty50 universe.
"Mixed global cues are keeping market participants on edge and we expect the trend to continue, at least in near future," said Ajit Mishra, VP-Research at Religare Broking.
The RBI said the equity market's outperformance has led to "overstretched valuations".
Morgan Stanley Chief Asia and Emerging Market Equity Strategist Jonathan Garner told CNBC-TV18 that valuations in India have run up above emerging market averages.
Most auto stocks jumped, lifting the Nifty Auto index 2.5 percent, after Morgan Stanley said the semiconductor chip shortage issues are now "in the rear-view mirror".
Coforge shares spiked 4.5 percent after the IT firm filed papers with the US market regulator to float an IPO via American Depository Receipts.The stock was the top gainer in the Nifty IT index, which rose half a percent. Tech Mahindra rose 1.3 percent, Wipro 0.5 percent and Infosys 0.2 percent, but TCS declined 0.2 percent.
Asian Paints shares gave up initial gains to end half a percent lower, after the paintmaker confirmed a 4-6 percent price hike effective December 5.
"Among the sectors, the continuous underperformance of the banking pack is dragging the benchmark lower... In the current scenario, it is prudent to stay light and wait for clarity," Mishra added.
The Nifty Bank index ended one percent lower, with 10 of its 12 constituents falling for the day. SBI declined 2.4 percent, HDFC Bank 0.6 percent, Kotak Mahindra Bank 0.8 percent and ICICI Bank 1.4 percent.
Broader markets were mixed, with the smallcap index rising half a percent but the midcap index ending the day 0.3 percent lower.
Thermax, TCNS Clothing, Greaves Cotton and SpiceJet, closing between 7.5 percent and 10.7 percent higher, were among the top gainers in the midcap and smallcap segments. Metropolis Health, Endurance, Maharashtra Seamless and Esab India -- down 4.6-6 percent -- were among the losers.
Around 200 stocks in the BSE 500 index settled with gains.
Meanwhile, European equity benchmarks hit record highs amid signs of easing US-China tensions, strong earnings and dovish statements from the European central bank. The pan-European Stoxx 600 index was last up 0.2 percent.
S&P 500 futures were down 0.1 percent, suggesting a muted start ahead on Wall Street.
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