By Abhishek Vishnoi
MUMBAI (Reuters) - The BSE Sensex fell for a second consecutive session on Wednesday as investors locked in profits in shares of blue chip companies such as ICICI Bank ahead of U.S. monthly jobs data and results of state elections due later in the week.
Delhi held local elections on Wednesday as part of a slew of state polls this month. Results will be declared on Sunday and investors will watch them for clues on how the world's biggest democracy is likely to vote in the general elections due by May next year.
Signs the country could be divided in elections could disrupt a rally that has seen shares gain nearly 20 percent since late August.
Meanwhile, investors are also growing worried the Federal Reserve will soon start tapering its monetary stimulus, hurting foreign flows into emerging markets such as India. Fears of the withdrawal of this easy money roiled Indian markets during the summer, sending the rupee to a record low.
"As we enter the last month of 2013, we expect the market to respond to the outcome of state elections and comments from the Fed officials regarding the timing of the QE3 withdrawal," said Dipen Shah, head of private client group research at Kotak Securities.
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The Sensex fell 0.7 percent, or 146.21 points, to end at 20,708.71, marking its lowest close in nearly a week.
The Nifty fell 0.66 percent, or 40.90 points, to end at 6,160.95, closing below the psychologically important 6,200 level.
Among blue chip shares, ICICI Bank fell 1.8 percent, while Larsen and Toubro ended down 1.5 percent.
Meanwhile, ITC fell 2 percent while Hindustan Unilever ended 1.2 percent lower.
Maruti Suzuki dropped 1.4 percent on continued pessimism after its sales in November fell by 10.7 percent and as the dollar rose against the yen.
Bajaj Auto declined 1.1 percent after the company said its November sales fell 17 percent.
Rival Eicher Motors ended 4.1 percent lower on profit taking after marking an all-time high of 5,340 rupees on Tuesday.
Among the stocks that gained, VST Tillers Tractors rose 5 percent while miner Ashapura Minechem rallied 5.3 percent after large institutional investors bought stakes via block deals on Tuesday.
(Editing by Anupama Dwivedi)