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BENGALURU - Indian shares ended a tick lower on Tuesday as concerns around rising global inflation and high valuations in the domestic market outweighed optimism around the country's declining COVID-19 cases.

The blue-chip NSE Nifty 50 index closed down 0.07% at 15,740.10, while the benchmark S&P BSE Sensex settled 0.1% lower at 52,275.57.

Both indexes had scaled record peaks on Monday as some Indian states eased lockdowns and daily COVID-19 cases hit a two-month low.

"Globally, inflation is still a worry and in India, participants are bracing for states to lift restrictions," said Anand James, chief market strategist at Geojit Financial Services in Kochi.

"As the Nifty approaches the 16,000 mark, there is a bit of buyer exhaustion, but sectoral rotation is keeping markets buoyant."

Analysts also said investors were uneasy about high valuations in the home market, while they looked to key central bank meetings for clues on the direction of the world economy.

U.S. inflation data is due later this week and will be closely watched for clarity on tapering of policy support from the Federal Reserve. The European Central Bank is also set to meet later in the week.

On Tuesday, the three biggest drags on the Nifty 50 were HDFC Bank, mortgage lender HDFC and ICICI Bank. The private-sector banks index, which has added 7.28% this year, fell 0.98%.

Overall losses were limited, however, as the Indian government on Monday pledged to provide free COVID-19 vaccines to all adults, in an effort to rein in a pandemic that has killed hundreds of thousands.

IT stocks extended gains to a fourth session and closed up 1.2%, boosted by a 1.7% rise in index heavyweight Infosys Ltd

Meanwhile, daily COVID-19 cases in India eased, with data from the health ministry on Tuesday showing 86,498 infections in the last 24 hours, the lowest in 66 days.

(Reporting by Chandini Monnappa in Bengaluru; Editing by Devika Syamnath)