Updates for market close

By Vivek Kumar M and Bharath Rajeswaran

July 3 (Reuters) - Indian shares inched lower on Thursday as continued profit taking in financials overshadowed optimism over easing global trade tensions.

The Nifty 50 .NSEI fell 0.19% to 25,405.3 points and the BSE Sensex .BSESN lost 0.2% to 83,239.47. Both benchmarks had risen around 0.5% intraday.

Financials .NIFTYFIN, heaviest sector on the benchmarks, slipped 0.5%, falling for the fourth straight session on likely profit booking after hitting a record high on Friday, analysts said. The sectoral index fell 2.2% in four days, but is still up 13.7% for the year.

Seven of the 13 major sectors logged losses. The broader small-cap .NIFSMCP100 rose 0.3%, while mid-caps .NIFMDCP100 was flat.

"While the market is consolidating after the recent gains, the larger trend remains positive," said Aamar Deo Singh, senior vice president at Angel One.

With the benchmarks up 15% between March and June, stretched valuations mean any further significant upside hinges on solid earnings delivery and a favourable trade deal with the U.S., two analysts said.

Asian shares inched higher, with MSCI's Asia ex-Japan index .MIAPJ0000PUS up 0.3%, after U.S. President Donald Trump announced a 20% tariff on Vietnamese exports under a new deal, fueling hopes of further trade breakthroughs. MKTS/GLOB

U.S. and Indian trade negotiators were pushing on Wednesday to try to land a tariff-reducing deal, but some disagreements remained, Reuters reported citing sources.

Kotak Mahindra Bank KTKM.NS fell 2% after Macquarie downgraded it to "neutral" from "outperform", citing high valuations at current levels following the stock's 19.1% year-to-date rally.

Investors await U.S. employment data for June, due later in the day, for clues on the Federal Reserve's future rate action.

Among individual stocks, Punjab National Bank PNBK.NS dropped 3.2% after reporting slower loan growth in its June-quarter update. D-mart operator Avenue Supermarts AVEU.NS lost 1% on moderation in its sales growth in its quarterly business update.

(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Harikrishnan Nair, Nivedita Bhattacharjee, Ronojoy Mazumdar and Sonia Cheema)

((VivekKumar.M@thomsonreuters.com;))