Equity benchmark Sensex pared early gains to end lower on Tuesday, pressured by selling in index majors Reliance Industries, Powergrid and ICICI Bank amid a mixed trend in global equity markets.

Besides, continuous foreign fund outflows also dented investor sentiment, traders said.

However, strong buying in HDFC Bank, Infosys, NTPC and TCS restricted the decline.

In a highly volatile trade, the 30-share BSE Sensex declined 68.36 points or 0.10 per cent to settle at 66,459.31. During the day, it hit a high of 66,658.12 and a low of 66,388.26.

The NSE Nifty fell 20.25 points or 0.10 per cent to end at 19,733.55.

"There was caution amongst the investors as markets exhibited a range-bound trend and ended marginally lower ahead of the RBI's monetary policy next week.

"Markets would continue to look for global cues, as the recent rally was too fast-paced, with valuations getting expensive. Markets will continue to select bouts of profit-taking even as the overall undertone remains bullish," said Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

Powergrid tumbled over 5 per cent on the Sensex chart, followed by Bajaj Finserv, IndusInd Bank, State Bank of India, Reliance Industries, Maruti, Asian Paints, Larsen & Toubro and Bajaj Finance.

Powergrid has posted over a 5 per cent decline in consolidated net profit for the quarter ended June 2023.

In contrast, NTPC, Tech Mahindra, HCL Technologies, Mahindra & Mahindra, Axis Bank, Tata Consultancy Services, Infosys and JSW Steel were the biggest gainers.

In the broader market, the BSE midcap gauge dipped 0.23 per cent, while smallcap index climbed 0.50 per cent.

After opening with a positive note, the market showed intraday zig-zag moves within a narrow range for the better part of the session, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Among the indices, realty fell by 1.78 per cent, services declined by 0.48 per cent, power (0.32 per cent), FMCG (0.21 per cent) and oil & gas (0.17 per cent).

IT jumped 1.02 per cent, teck climbed 0.79 per cent, metal (0.75 per cent) and commodities (0.59 per cent).

"Asian stocks ended mixed on Tuesday as investors began to find more cause for cheer over global economic prospects than reasons to worry, even as data showed risks remain.

"European markets were lower on Tuesday as investors digested a busy week of earnings and weak Eurozone manufacturing activity in July..." Deepak Jasani, Head of Retail Research, HDFC Securities, said.

In Asian markets, Seoul and Tokyo ended with gains, while Hong Kong and Shanghai settled lower.

European markets were trading lower. The US markets ended in the green on Monday.

Manufacturing sector activities in India moderated for the second straight month in July as rates of expansion in output and new orders eased slightly, a monthly survey said on Tuesday.

Global oil benchmark Brent crude dipped 0.49 per cent to USD 85.01 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 701.17 crore on Monday, according to exchange data.

"The domestic indices traded with a negative bias below the flattish trend, impacted by global peers.

"IT stocks rallied on hopes of a soft landing for the US economy. India's manufacturing activity remained robust, although marginally it moderated for the second consecutive month in July. The market direction in the upcoming days will be influenced by key data points, including auto sales figures, US PMI, and US job data," said Vinod Nair, Head of Research at Geojit Financial Services.

Gross GST collection rose 11 per cent to over Rs 1.65 lakh crore in July, crossing the Rs 1.6 lakh crore mark for the fifth time since the rollout of the indirect tax regime.

"Overall, we expect the market to consolidate in a range with a positive bias as we move further into the earning season. BOE interest rate decision along with a slew of economic data points including US Manufacturing PMI and monthly Non-Farm Payroll data during the week would provide direction to the markets," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said.

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