BSE Sensex hits 1-1/2-mth closing low as banks, Cipla shares plunge, NSE Nifty down by 20

Analysts say consolidation is expected to continue ahead of the 2013/14 federal budget to be announced later this month, which is seen as a key test of the government's commitments to shore up its finances.

"The market perhaps wants to consolidate before any next move, ahead of the Budget, which can be a bit populist," said Vijay Kedia, director at private wealth management firm Kedia Securities.

The key things to watch for now are how many more reforms come and how soon they get implemented, to stoke growth and avoid rating cuts, added Kedia.

The benchmark BSE index fell 0.3 percent, or 59.40 points, to end at 19,580.32, falling for a sixth day to mark its biggest losing streak since Nov 21, 2011.

The broader NSE index fell 0.34 percent, or 20.40 points, to end at 5,938.80.

Bank stocks such as ICICI Bank Ltd fell 0.9 percent, on concerns that growth is likely to slowdown even as inflation remains high, after government's FY 13 GDP estimates came in lower than market expectations.

Shares in Cipla Ltd fell 2.7 percent, a day after the company's October-December net profit missed estimates, which were followed by downgrades from Morgan Stanley and CLSA citing lower-than-expected margins and earnings outlook.

State-run power utility NTPC Ltd shares fell 2.5 percent after its shares sale price was set at 145 rupees, or at a 4.5 percent discount to its Wednesday's close. NTPC's weight in MSCI India index would rise from 0.63 percent to 1.79 percent as the company's free float stock increases after its offer for sale, Citigroup said in a note, quoting MSCI.

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