BSE Sensex falls marginally as reform gloom sets in

The BSE Sensex fell for a third straight session on Wednesday, led by market bellwether Reliance Industries, as a poor election result for the country's ruling Congress party appeared to pour cold water on an already-struggling reform agenda.

The Congress' flop at the ballot box in Uttar Pradesh, India's most politically vital state, has hit hopes of renewed efforts to re-launch reforms and reverse a slowdown in growth, as the markets await the annual budget this month.

"The market has lost quite a lot of value and today we saw that it is largely confused on the trend going forward, as we look towards the budget next week," said Deven Choksey, chief executive officer at K R Choksey Shares and Securities in Mumbai.

The government is set to unveil the annual budget on March 16, and investors will look for commitment on a string of key economic reforms from a government that has been hamstrung by corruption scandals and coalition dissent over the past year.

The benchmark 30-share BSE index closed down 0.16 percent at 17,145.52, with all but 13 of its components in the negative territory.

The index, which fell a combined 2.63 percent on Monday and Tuesday to hit its lowest close in more than five weeks, has slipped 7 percent since February 21, when it hit its highest close in nearly seven months.