Indian shares ended more than a per cent lower on Wednesday, posting the second drop after four sessions of gains, as investors turned jittery ahead of tomorrow's rail budget and next week's federal budget, with a reversal in oil prices putting further pressure on the market.

Equity markets back home were also slightly volatile a day ahead of the expiry of monthly derivatives contracts.

The 30-share BSE index Sensex ended lower by 321.25 points or 1.37 per cent at 23,088.93 and the 50-share NSE index Nifty ended down by 90.85 points or 1.28 per cent at 7,018.70.

Barring oil & gas, all other BSE sectoral indices ended in the red. Among them, metal index fell the most by 2.62 per cent, followed by healthcare 1.72 per cent, capital goods 1.67 per cent and banking 1.36 per cent, while oil & gas index was up 0.21 per cent.

Major Sensex losers were BHEL (-4.97%), NTPC (-4.2%), Tata Motors (-3.63%), HDFC (-2.68%) and ICICI Bank (-2.63%), while the top five gainers were Bharti Airtel (+0.93%), M&M (+0.54%), Asian Paints (+0.51%), HUL (+0.42%) and Axis Bank (+0.38%).

A report by SMC Global said: " Asian stocks fell, following declines in US shares, as oil resumed losses and a stronger yen weighed on Japanese equities. US stocks slumped from six-week highs, with the Dow Jones Industrial Average falling more than 180 points as crude dropped on concern OPEC members won't curb output. Equities from Europe to emerging markets slid earlier in the session after China's central bank unexpectedly weakened the reference rate used for managing the yuan, rekindling concern over the state of the world's second-largest economy. All eyes are now on Union Budget 2016-17 to be announced on 29 February 2016. Finance Minister Arun Jaitley may provide a roadmap for rationalisation of the corporate tax exemptions in Budget. US consumer confidence index tumbled to 92.2 in February from a downwardly revised 97.8 in January. Economists had expected the consumer confidence index to dip to 97.2 from the 98.1 originally reported for the previous month.

Shares fell in Europe and Asia on Wednesday as oil prices dipped after Saudi Arabia effectively ruled out output cuts by major producers, lifting investor appetite for low-risk assets such as the Japanese yen and gold.

Oil prices , seen as a barometer of broader market sentiment, extended sharp falls from the previous session, due to an apparent lack in cooperation among members of the Organization of the Petroleum Exporting Countries (OPEC) to freeze or cut production amid global supply glut.

"From a global stand point, emerging markets have not matched-up commensurately in terms of fundamental growth and corporate earnings", said Dhananjay Sinha, head of research at Emkay Global Financial Services.

"As a result of that, there has been a retrenchment of flows from emerging markets in general."

Overseas investors sold $41.10 million of stocks on February 22, taking this year's outflow to $2.43 billion.

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