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BENGALURU -Indian shares wiped out the session's gains in the final hour of trade on Tuesday, with selling seen across the board after Russia said it was starting a new stage of what it calls its special military operation in Ukraine.

The NSE Nifty 50 index closed 1.25% lower at 16,958.65, while the S&P BSE Sensex fell 1.23% to 56,463.15, after rising around 0.5% each earlier in the session.

"Another stage... (in eastern Ukraine) is beginning and I am sure this will be a very important moment of this entire special operation," Russian Foreign Minister Sergei Lavrov said on Tuesday.

The latest development triggers fresh set of worries for investors, the whole world was thinking the Russia-Ukraine situation was cooling off but it is heating up again, said Prashanth Tapse, vice president (research), Mehta Equities.

Hammered by losses in technology stocks after a weak set of earnings from IT companies, both indexes had shed roughly 2% each in the previous session.

At close on Tuesday, 43 of the 50 stocks on the Nifty 50 index were trading in negative territory. All major Nifty sub-indexes settled lower with Nifty's IT sub-index sliding for a eighth straight session and closing down 3%.

Private-sector lenders HDFC Bank extended losses to a ninth session and settled down 3.8%.

Nifty's energy sub-index, which scaled record highs during the session, gave up gains and settled a tick higher at 0.06%.

Among the few gainers, Coal India settled higher for a third straight session, adding 4.4% after the miner said it raised supplies to thermal power stations due to rising demand.

Reliance Industries closed up 3.8% at a two-week high after Morgan Stanley added it to its global emerging market focus list, citing "multiple positive triggers lining up for the conglomerate to outperform".

($1 = 76.4000 Indian rupees)

(Reporting by Chandini Monnappa and Nallur Sethuraman in Bengaluru; Editing by Shailesh Kuber)