The 30-share Sensex ended down 261 points at 28,747 and the 50-share Nifty ended down 83 points at 8,684.
Markets ended lower following the expiry of February derivative contracts with IT majors leading the decline along with defensive pharma and FMCG shares.
Further, the Railway Budget announcement, which acts as a precursor to the Union Budget, failed to boost investor sentiment The 30-share Sensex ended down 261 points at 28,747 and the 50-share Nifty ended down 83 points at 8,684.
The February derivative contracts which expired today recorded the highest turnover in the F&O segment at Rs 5.81 lakh crore.
"On provisional basis have seen Rollover of 78% in Nifty futures compare 76.52% of Total rollover of Jan series. Rollovers are better than than past six month average," said Chandan Taparia, derivative analyst at Anand Rathi Securities adding that higher rollovers seen as traders have taken position in March series to trade the Budget move which is on second day of this series on Saturday.
Among the individual stocks ITC, HDFC, Jublfood, IDBI, Jswsteel, Grasim, Ranbaxy have seen witnessed high rollovers, he said.
Meanwhile, foreign institutional investors were net buyers to the tune of Rs 516 crore on Wednesday, as per provisional stock exchange data.
The Indian rupee continued to extend gains against the US dollar ahead of the Union Budget and dollar selling by banks.
The Indian currency was trading higher at 61.76 to the US dollar compared to previous close of 61.96.
Meanwhile, global rating agency Standard & Poor's increased India's growth forecasts going forward to reflect a recent change in how gross domestic product is calculated by the government, and said the economy should be a "bright spot" in Asia.
Standard & Poor's increased its GDP growth forecast for India to 7.9% from 6.2% for the financial year 2015-16, on the back of higher investments and subdued oil prices.
RAIL BUDGET
Suresh Prabhu in Rail Budget vowed to make the Indian Railways as the prime economic driver, improvement in passenger safety and amenities along with system improvement and transparency.
However, there was not a single new train announced even as he decided to be passenger fare rates unchanged.
The four major goals outlined by Railway Minister Suresh Prabhu in his Rail Budget speech today include making a Rail a safer mode of transportm, delivering sustained and measurable improvement in customer experience and to make the Indian Railways financially sustainable.
On the operational side he said that the daily passenger carrying capacity will be raised to 30 million from 21 million, increasing track capacity to 1,38,000 km from 1,14,000 km and hiking annual freight carrying capacity by 50% to 1.5 billion tonne from 1 billion tonne.
Meanwhile, there were some freight hikes in some of the commodities with the highest increase for urea at 10% followed by 6.3% for coal, 2.7% for cement and marginal rise of 0.8% for iron and steel.
Coal India was down 1.6%, Hindalco, Tata Steel, Sesa Sterlite 1-2.7% each.
Among rail-related stocks, Texmaco Rail ended down 2.4%, Texmaco Infra was up 1%, Cimmco was down 4.6%, Kalindee Rail down 1.6%.
However, Zicom was up 7% on plans to install surveillance cameras in suburban trains to improve women's safety.
IT exporters were among the top Sensex losers on the back of the strengthening rupee. Infosys, TCS and Wipro ended down 0.6-2.6% each.
Bank shares also witnessed profit taking with HDFC Bank, ICICI Bank and SBI ended down 0.4-2.1% each.
Sun Pharma ended down 2.8%. With respect to a news article appearing in Financial Chronicle on February 24, 2015 titled "Sun recalls 3263 bottles of epilepsy drug in US" the company in a filing said "We wish to clarify that this is a voluntary recall and there is no material impact, of the matter referred to in the article, on the performance / operations of the Company."
Rail-related shares such as Texmaco Rail, Texmaco Infra, Kalindee Rail and Stone India ended down 2-6% each. However, Zicom ended up 5% on plans to install surveillance cameras in suburban trains to improve women's safety.
In the broader market, the BSE Mid-cap index and Small-cap index ended down 0.8% each. Market breadth ended weak with 1,746 losers and 1,079 gainers on the BSE.
