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India's Nifty 50 index dipped in volatile trading on Tuesday as investors booked profits after the blue-chip index hit a record high near the open, while the small-caps and mid-caps snapped an 11-session winning run.

The Nifty 50 ended 0.02% lower at 19,993.20, after hitting an all-time high earlier for the second straight session. The 30-member S&P BSE Sensex settled 0.14% higher at 67,221.13.

The volatility index rose to 11.69, the highest since Aug. 31.

"The profit-booking seen today at near record highs was just a matter of time due to stretched valuations," said Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers.

The more domestically-focussed small-caps and mid-caps fell 4.1% and 3.07%, respectively, posting their steepest intraday drops for 2023.

The small- and mid-caps have gained 9.4% and 7.7%, respectively, over the last 11 sessions, and have posted numerous record highs along the way.

"Earnings in small- and mid-caps have to catch up to their lofty valuations to justify further rally," said Solanki, echoing Kotak Institutional Equities' concerns.

On the day, oil and gas stocks lost 2.82% as crude oil prices held above $90 a barrel. [O/R]

Auto stocks tumbled 1.86% after India's road transport minister said he would propose an additional 10% tax on diesel vehicles, although he said the proposal was not "currently under active consideration by the government."

Among the rare bright spots were IT stocks, which gained 1.03% on the heels of the tech-led rally on Wall Street overnight.

The top Nifty gainers included L&T, which jumped to a record high after raising its buyback price. Fellow constituent ICICI Bank rose 1.25% after the central bank ratified the top roles at the lender.

India's retail inflation data for August is due after the close, with economists estimating inflation eased to 7% from a 15-month high in July.