The 30-share BSE index closed down 1.54%, or 283.36 points, at 18,145.25, with 24 of its components in the red.

The market is now looking towards the federal budget and central bank policy review, both due in mid-March, for positive triggers, dealers said.

Financials led the losses with the country’s top lender State Bank of India closing 8.05% lower at Rs 2,255, while its private sector rival ICICI Bank settled 3.39% lower at 957.70 rupees.

“The market had a run-up ahead of the budget itself and is seeing some correction now,” said Deven Choksey, managing director of K. R. Choksey.

The central bank reviews policy on 15 March, and the government will unveil its annual budget the following day.

WATCH VIDEO

Mint’s Pallavi Pengonda says the festive season has ended on a damp note for India’s retailers, which saw poor sales and pressure on their margins

Loading video...

The market will bounce back as the budget is likely to have some positive announcements, while the central bank may cut interest rates at its policy review, Choksey said.

In the broader market, there were 1,268 losers against 227 gainers on volume of 1.30 billion shares.

“The outlook for the market is firm. There is enough liquidity that could lead to further upside,” said Suresh Parmar, associate vice president institutional equities at KJMC Capital Markets.

He said that the market could witness high volatility on account of expiry of derivatives contract expiry on Thursday.

The 50-share NSE index ended down 1.82% at 5,505.35.

“Market is set to move up. The rollovers so far suggest investors are pretty aggressive, confident and building positions ahead of the budget-month,” Samir Gilani, head of equities and derivatives at Mape Securities said.

“There is a strong institutional support to the market,” said Gilani.

Kingfisher Airlines ended lower 5.98% after gaining in early trade after banking sources told Reuters its lenders have not agreed to extend further loans to the debt-crippled carrier.

Several newspapers had reported earlier Wednesday that State Bank of India (SBI) would throw a lifeline to Kingfisher, which is majority-owned by liquor baron Vijay Mallya, giving figures ranging from Rs 200 to Rs 1,650 crore ($40-335 million).

Shares in Jet Airways India closed down 9.17% and Spicejet down 8.89%, after Bank of America Merrill Lynch retained its “underperform” rating on the two carriers.

The US-based investment bank cited slowing traffic growth, strong capacity addition by low-cost carriers and insufficient growth in yields for being “negative” on the sector.

Energy major Reliance Industries fell 1.2% on profit taking, after it rallied in the previous session on expectations of announcement of petrochemicals joint venture.

Post trading hours on Tuesday, Reliance, which has the heaviest weight on the main index, said it had finalised a joint venture with Sibur, Russia’s largest petrochemical company, to set up a butyl rubber plant in India.

Sun Pharmaceutical ended up 1.08% after the US Food and Drug Administration said it reached a temporary deal to import a cancer drug from the Indian drugmaker.

The euro and European shares edged lower on Wednesday after economic data suggested the euro zone may slide back into recession, hurting the global economic outlook, while concerns about the sustainability of the latest Greek bailout deal also weighed.

STOCKS

Welspun Corp fell 3.56%. HSBC downgraded the steel pipes maker to ‘neutral´ from ‘overweight´ and cut target price to Rs 165 from Rs 265, after it reported a lower-than-expected sales volume.

NTPC Ltd closed down 1.8%, after Deutsche Bank downgraded the power producer to ‘hold´ from ‘buy´, citing execution delays, challenges in coal logistics and unanticipated policy changes as risks for the state-run company.