BENGALURU, March 5 Reuters Indian shares fell on Tuesday, dragged by information technology stocks as investors looked to the United States for cues, while a jump in Tata Motors on demerger plans capped losses.

The bluechip index NSE Nifty 50 shed 0.5 to 22,291.2, while the BSE Sensex dropped 0.55 to 73,456.85, as of 1023 a.m. IST.

Ten of the 13 major sectors declined, with heavyweights financials and IT dropping 0.5 and 1.6, respectively.

IT companies earn a significant share of their revenue from the U.S., where Federal Reserve Chair Jerome Powell39;s congressional testimony and key labour market data are both due later in the week, with markets awaiting clues on future rate trajectory.

A CLSA downgrade on Tata Consultancy Services and HCLTech to 39;sell39; from 39;underperform39;, citing weak 2024 growth outlook also dragged the stocks. TCS and HCLTech fell about 2 each.

Auto stocks climbed 1.5, boosted by a 6.7 jump in Tata Motors, which announced plans to split into two separate listed companies. The surge in auto stocks capped index losses.

While the outlook for Indian stock markets remains positive, high valuations can prove a resistance for further rallies and lead to further consolidation, said Raghvendra Nath, managing director at LadderUp Wealth Management.

The broader, more domestically focussed smallcaps and midcaps fell 1.2 and 0.3, as concerns persisted over excessive fund inflows into the segments.

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