Mumbai, May 13 : The Indian stock markets ended lower on Tuesday as investors booked profits following Monday's sharp rally. The sell-off was also fuelled by the potential fallout from the ongoing US-China trade talks.

A day after posting their best session in over four years, the benchmark indices turned red. The Sensex fell 1,281.68 points, or 1.5 per cent, to close at 81,148.22.

Similarly, the Nifty dropped 346.35 points, or 1.39 per cent, to settle at 24,578.35.

The previous session had seen markets surge nearly 4 per cent as fears of conflict between India and Pakistan eased. However, that spike was largely driven by short covering, prompting many retail investors to book profits on Tuesday.

According to analysts, markets took a breather after a phenomenal start to the week.

Despite the weakness in headline indices, the broader markets managed to stay in the green.

The BSE Midcap index edged up by 0.17 per cent, while the BSE Smallcap index rose 0.99 per cent -- signalling some resilience in smaller and mid-sized stocks.

Sector-wise, most major indices ended in the red. Nifty Auto, Financial Services, FMCG, and IT stocks were among the worst hit, falling over 1 per cent each.

Other sectors including Nifty Bank, Metal, Oil and Gas, Realty, and Consumer Durables also registered losses of up to 1 per cent.

On the other hand, Nifty PSU Bank, Media, Pharma, and Healthcare indices showed gains of up to 1.66 per cent.

Out of the Sensex stocks, Infosys was the biggest loser, down 3.57 per cent, followed by Eternal (-3.38 per cent), Power Grid (-3.4 per cent), HCL Tech (-2.94 per cent) and TCS (-2.88 per cent).

On the upside, Sun Pharma, Adani Ports, Bajaj Finance, State Bank of India, and Tech Mahindra gained up to 1 per cent.

The India VIX, which measures market volatility, eased slightly by 1.05 per cent to 18.20.

'Geopolitical tensions remained in focus as market participants monitored the fragile ceasefire between India and Pakistan, adding to the cautious sentiment,' said Sundar Kewat of Ashika Institutional Equity.

Ajit Mishra of Religare Broking Ltd said the dip in the index reflects caution among participants despite easing geopolitical tensions and stable global cues.

'However, we expect the overall tone to remain positive, given the noticeable support in the 24,400'24,600 zone. The focus should remain on identifying key sectors and themes showing relative strength and using intermediate pauses to accumulate quality stocks,' he mentioned.

/IANS