Among Asian indices, the Nikkei (-1.79%), Hang Seng (-0.54%) and Kospi (-0.46%) closed in the red.
To add to the pessimism, the latest data on the domestic industrial activity reported on Wednesday was disappointing as the Index of Industrial Production (IIP) for December contracted 0.6% y-o-y.
However, market observers are bullish on markets in the long-term. "Our March 2015 target for Sensex is 34,000," said Gaurav Mehta, VP, Ambit Capital.
Among sectoral indices, BSE Bankex (-2.11%), BSE Oil & Gas (-1.84%) and BSE Power (-1.68%) were the major losers. Among individual stocks, Cipla (-7.70%), Coal India (-3.39%) and ONGC (-3.29%) were the major losers. Cipla on Wednesday reported 17% year-on-year fall in consolidated net profit to Rs 284 crore for the quarter ended December.
Sugar stocks also rallied after Cabinet Committee of Economic Affairs (CCEA) approved subsidy of Rs 3,333 per tonne for export of 4 million tonnes of raw sugar for February and March. India is the second biggest producer of sugar after Brazil. Shree Renuka Sugars (2.54%), Balrampur Chini (5.40%), Bajaj Hindusthan (1.57%) closed higher on BSE.