Benchmark equity indices began the day on a bearish note on Wednesday tracking weak Asian markets and fresh foreign fund outflows, but later recovered all the lost ground to trade in the green on buying in Reliance Industries.

Investors are eyeing the two important events lined up ahead -- the interim budget and the US Fed interest rate decision -- to derive further cues from.

The 30-share BSE Sensex declined 243.07 points to 70,896.83 in early deals. The Nifty also slipped 73.25 points to 21,448.85.

However, later both the benchmark equity indices recovered the early lost ground and were trading in the green. The Sensex quoted 146.33 points up at 71,286.23, and the Nifty traded higher by 58.25 points to 21,580.35.

Among the Sensex firms, Larsen & Toubro declined 5 per cent after its December quarter earnings.

Titan, Kotak Mahindra Bank, ICICI Bank, Infosys, Axis Bank and State Bank of India were among the other laggards.

Tata Motors, Reliance Industries, Tata Steel and Bajaj Finserv were among the gainers.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading lower.

The US markets ended mostly down on Tuesday.

"The US Fed decision tonight and the interim budget tomorrow will weigh on markets in the near-term. Global markets will be keenly watching the Fed comment on the timeline and quantum of rate cuts," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Global oil benchmark Brent crude declined 0.45 per cent to USD 82.50 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,970.52 crore on Tuesday, according to exchange data.

The BSE benchmark fell by 801.67 points or 1.11 per cent to settle at 71,139.90 on Tuesday. The Nifty declined 215.50 points or 0.99 per cent to 21,522.10.