Indian shares snapped a three-day winning streak on Wednesday, dragged by high-weightage financials and metal stocks, as caution over the US debt ceiling deadlock weighed on stock markets around the globe.

The blue-chip Nifty 50 index closed down 0.34 per cent at 18,285.40, while the benchmark S&P BSE Sensex fell 0.34 per cent to 61,773.78.

Financial stocks lost 0.80 per cent, with ICICI Bank Ltd and HDFC Bank Ltd among the top Nifty 50 losers.

Metal stocks, which jumped in the last three sessions, lost over 1.5 per cent. Adani Enterprises Ltd, with a 17 per cent weightage in the Nifty, lost 6 per cent and was the top loser on the index. The stock had surged 40 per cent over the last three sessions.

Rising uncertainty over US debt ceiling talks, nine days ahead of a potential default, and hawkish comments from two Federal Reserve officials, also weighed on sentiment. Asian markets remained subdued.

Why did the RBI withdraw ₹2,000 notes?  Why did the RBI withdraw ₹2,000 notes?  

"It is prudent to exercise caution," said Prashant Tapse, senior vice president for research at Mehta Equities Ltd. "The U.S. debt ceiling negotiations continue to create ripples, casting a shadow on markets."

Investors also await the minutes of the latest Fed policy meeting due at 11:30 p.m. IST on Wednesday, for cues into the US central bank's future rate trajectory.

Pharma stocks advanced over 1 per cent, led by a more than 2 per cent rise in Sun Pharmaceutical Industries Ltd after global brokerage Macquarie reiterated "outperform" rating on strong quarterly results by the company's unit Taro Pharmaceuticals. Sun Pharma was the top Nifty 50 gainer.

Among individual stocks, Mahindra CIE Automotive Ltd jumped nearly 5 per cent as 3.24 per cent equity changed hands in block deals after promoter Mahindra & Mahindra Ltd sold its entire 3.195 per cent stake in the company.

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