The benchmark indices retreated after Friday's gain. This fall could be attributed to drop in commodities prices in international markets and weak global cues. The sell-off in oil & gas, metal, cement, realty, telecom, power and select banking stocks pushed the Nifty below the 4250 mark.

The markets had started on a positive note but after an hour of trade, both indices turned volatile with negative bias. They lost ground further in the last one hour of trade. The 50-share NSE Nifty closed at 4235.25, down 1.82% or 78.35 points, after seeing a day's low of 4221.90. The 30-share BSE Sensex has touched an intraday low of 14,269.77, before closing at 14,326.22, down 195.67 points or 1.35%.

Deven Choksey of KR Choksey Securities said after having such a good run up probably we had to have some amount of correction and that too before an important event like Budget. So this shakeout has happened largely from that perspective."

"4,150 on the downside, if it breaks below 4,200 levels, would be a good possibility otherwise on 4,450, it is meeting a resistance. One should trade this range till we have the Budget and full clarity coming back into the markets."

Big heavyweight Reliance Industries fell another 4%, after losing over 13% in last week, as Bombay HC gave decision against the company in RIL-RNRL gas case. Choksey said, "Reliance is going to drag the market till the time Supreme Court (SC) gives complete clarity on its judgement and I think that is an area which we are going to be carefully hereafter in coming days and months."

Among the broader indices, the BSE Midcap Index lost 28.22 points or 0.57%, to 4,930.51 and the Smallcap Index fell 0.33% or 18.39 points, to settle at 5,599.57.

The market breadth also turned negative due to fall in the broader indices; about 1196 shares advanced while 1568 shares declined. Nearly 385 shares were unchanged.

Total traded turnover dropped to Rs 93277.58 crore as against Rs 1,04,153.24 crore on Friday. This comprised of Rs 16,545.47 crore from the NSE cash segment, Rs 71,601.05 crore from the NSE F&O and the balance Rs 5,131.06 crore from the BSE cash segment.

Global Cues:
At the time of closing of Indian equities, European markets were under pressure. The FTSE was down 63 points, to 4,283. The CAC fell 54 points, to 3,166 and the DAX declined 68 points, to 4,770.

Among the US futures, the Dow Jones futures fell 45 points, to 8,431 and the Nasdaq Futures slipped 14 points, to 1,450.

Asian markets ended higher. Kospi gained 1.2% and Taiwan Weighted rose 1.77%. Shanghai Composite, Hang Seng and Nikkei went up 0.4-0.8%. However, Straits Times was down just 0.28%.