BENGALURU, Jan 23 (Reuters) - Indian shares surrendered early gains to drop in the afternoon session on Tuesday, as HDFC Bank led a decline in financials, while Zee Entertainment plunged nearly 30% after its merger with Sony's India unit collapsed.
The blue-chip NSE Nifty 50 and the S&P BSE Sensex both slid 1% each, to 21,352.25 points and 70,750.29, respectively, as of 1:22 p.m. IST.
The Nifty had risen by as much as 0.8% and the Sensex by 0.86%, earlier in the day.
HDFC Bank fell 3%, extending to 14% its losses since its disappointing results last week. It was the biggest drag on the benchmark Nifty index and sparked a 1.6% slide in financial stocks, which have the most weight among the 13 major sectors.
Mixed results this earnings season indicate specific stocks will drive the market as no common trend has emerged so far, said Saurabh Jain, assistant vice president for research at SMC Global Securities.
"HDFC Bank continues to see weakness due to liquidations from foreign investors, while small- and mid-cap indexes are undergoing long-awaited corrections after the run-up in valuations," said Jain.
The small and mid-cap indexes were down 1.5% and 2.2%, respectively. They have outperformed their larger peers so far this year, replicating their form from last year.
"Losses in the market also came on the back of participants slashing their position into equities on volatile future and equity (F&O) expiry week," said Rahul Sharma, head of technical research at Mumbai-based investment advisory firm Equity99.
Meanwhile, Zee Entertainment plunged up to 30% and were set for their worst day ever after the cash-strapped broadcaster's failed $10 billion merger with Sony's local unit.
Cipla and ICICI Bank advanced 7% and 2%, respectively, after beating third-quarter profit estimates.
Cipla is among the top gainers in the Nifty 50 and the top gainer on the Nifty pharma index, which rose 2%.
Reporting by Manvi Pant in Bengaluru; Editing by Sonia Cheema, Dhanya Ann Thoppil and Savio D'Souza
Source: Reuters