BSE Sensex down 0.5%, NSE Nifty 0.71%, banks hit, defensives gain

The indexes fall on continued worries after a regional party withdrew from the ruling coalition, while concerns about growth remain after the central bank issued a cautious statement on monetary policy on Tuesday.

Global market uncertainty also weighs after a bailout plan for Cyprus fell into disarray, although hopes of a last-minute deal kept losses in Asian shares limited.

Banks extend falls with ICICI Bank down 1.9 percent and State Bank of India falling 2.8 percent.

Broader losses are capped as defensives shares gain. Hindustan Unilever gains 2.6 percent, while Cipla is up 2 percent.

* BSE Sensex likely to continue its losing streak today morning after RBI repo rates fell yesterday.

* SGX Nifty futures on the Singapore Exchange fall 0.2 percent, while the MSCI-Asia Pacific index excluding Japan gains 0.08 percent.

* Asian shares extended losses on Wednesday and investors gave the euro a wide berth after a bailout deal for Cyprus was thrown into disarray.

* Traders keenly eyeing news flow after the biggest ally in Prime Minister Manmohan Singh's coalition abruptly withdrew its support on Tuesday.

* Also on watch, India's cabinet may discuss lifting some curbs on its tightly regulated sugar sector, months after the prime minister's economic adviser recommended easing restrictions to help stabilise output.

* However, BSE Sensex will hit a record high this year on looser monetary policy and fiscal reforms, but concerns over a widening budget deficit could limit

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