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India's blue-chip indexes rose marginally in a volatile session on Tuesday ahead of key inflation data, while small- and mid-caps declined on concerns over stretched valuations.

The NSE Nifty 50 inched up 0.01% to 22,335.70, while the BSE Sensex settled 0.22% higher at 73,667.96.

The indexes traded between losses of 0.35% and gains of 0.6% during the session.

HDFC Bank rose 2.22%, its best in three weeks and led gains on the index, driven by multiple block deals.

Other large-caps like Reliance Industries, Tata Consultancy Services, Infosys rose between 0.6% and 2%.

In contrast, profit booking continued in the broader, more domestically focussed small- and mid-caps on the back of markets regulator flagging likely 'froth and irrational exuberance' in the segments.

They shed 2% and 1.4%, underperforming the benchmark indexes.

"We expect large-caps to continue to do well, but the small- and mid-cap space is getting hurt due to regulator's concerns over rich valuations and froth," said Yogesh Nagaonkar, CEO, Rowan Capital Services.

Small- and mid-cap stocks have lost about 7% and 2% respectively since SEBI sought more disclosures on Feb. 27, compared to a 0.6% rise in Nifty 50.

IT gained 0.64% ahead of key U.S. inflation data, which could influence the timing of the Federal Reserve's interest rate cuts. IT firms derive much of their revenue from the U.S.

Investors also await India's inflation data, which is expected to have declined to a four-month low in February, according to a Reuters poll of economists, due at 5:30 p.m. IST.

State-owned banks dropped 2.57% on rising concerns over near-term earnings.

Realty stocks tumbled 3.7% to log their worst session in seven weeks.

Realty and state-owned banks have gained 11.5% and 23.20% in 2024 so far, far outperforming the benchmarks, despite today's losses.