The Nifty Midcap index also closed in the red. About three shares declined for every two shares rising on the NSE.
The market fell for the first time in last 10 consecutive sessions, closing marginally in the red on Wednesday weighed by extended sell off in banks in last hour of trade. However, the rally in index heavyweight ITC capped losses.
The 30-share BSE Sensex was down 63.38 points at 34,331.68 and the 50-share NSE Nifty fell 22.50 points to 10,526.20 amid consolidation as investors look for corporate earnings to get market direction.
"After a smart upmove, we expect the markets to consolidate in the near term. Q4FY18 corporate earnings season, global developments and behaviour of crude oil prices & currency will dictate the market trend in the coming sessions," Jayant Manglik, President, Religare Broking said.
Traders should keep their positions hedged, while investors should stick to quality stocks, he advised.
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Nifty Bank, PSU Bank and Private Bank indices closed down 1 percent each after RBI Deputy Governor NS Vishwanathan has defended 1-day default clause of February 12 circular, saying default is a lagging indicator and not a leading indicator of financial stress.
HDFC Bank, Axis Bank, IndusInd Bank, ICICI Bank, Kotak Mahindra Bank and State Bank of India were down up to 2.66 percent.
Titan Company shares hit Rs 1,000-mark, but ended 2 percent lower on the day of Akshaya Tritiya.
Among index heavyweights, HDFC and Reliance Industries declined 0.6 percent each whereas ITC shares outperformed, rising nearly 3 percent after normal monsoon forecast brightened outlook for consumption sector.
In fact the FMCG index was biggest gainer among sectoral indices, gaining 1.7 percent. Godrej Properties, Dabur India, Godrej Industries and Tata Global gained up to 5 percent.
Media space was also in the limelight as the Nifty Media index gained 1.4 percent. Network 18, TV Today, Zee Entertainment, Sun TV Network, TV18 Broadcast and Jagran gained up to 3 percent.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Wipro, UltraTech Cement, Hindalco, GAIL and Tata Steel among others gained up to 3 percent while Tech Mahindra and HCL Technologies were down 1 percent each.
Bharti Airtel and Bharti Infratel gained 0.6 percent each. Sources told CNBC-TV18 that Bharti Infratel and Indus Towers merger is in final stages and the announcement is likely soon.
The Nifty Midcap index also closed in the red. About three shares declined for every two shares rising on the NSE.
Bombay Burmah, Kaya, Jaiprakash Associates, Parag Milk Foods, Mishra Dhatu, Delta Corp, Dabur India, V-Guard Industries, Indian Hotels, EIH Associated Hotels and Amara Raja Batteries gained up to 9 percent.
Kamat Hotels, Jet Airways, Andhra Bank, Bank of Baroda, Jaypee Infratech, Bhushan Steel, OBC, Balrampur Chini and Alok Industries fell up to 5 percent.
On the global front, Asian markets closed higher as Wall Street's advance overnight following strong earnings boosted sentiments. Japan's Nikkei and South Korea's Kospi ended up over a percent while China's Shanghai Composite and Hong Kong's Hang gained over 0.7 percent.
European markets were mixed, as investors monitored a fresh batch of corporate earnings and economic data. France's CAC was up 0.14 percent and Britain's FTSE gained 0.7 percent while Germany's DAX was down 0.1 percent at the time of writing this article.
Oil prices gained following decline in US crude inventories and ongoing risk of supply disruptions. Brent Crude futures were trading at USD 72.07 a barrel, up 0.68 percent while US crude futures were at USD 67.09 a barrel, up 0.86 percent.