The BSE Sensex fell for a second consecutive day on Thursday as investors took profits on expiry of monthly derivatives amid concerns about high oil prices.

The 30-share BSE index closed down 0.37 percent, or 66.75 points, at 18,078.50, after climbing into positive territory for some time. Eighteen of its components declined.

The markets were choppy because of the expiry of the derivatives contracts today, said Neeraj Dewan, director at Quantum securities in New Delhi.

From tomorrow the focus will be on global markets and if the U.S. markets close higher we could have a positive opening. If the oil situation gets murky it will affect Indian markets, he said.

India looks vulnerable to profit-taking in the short term after recent outperformance, rising oil prices, and seasonally tighter monetary conditions, UBS said in a note.

Investors are also awaiting further evidence on the health of the global economy as high oil prices threaten to fuel inflationary pressures and increase costs for companies, affecting their profitability.

India has asked Saudi Arabia to raise oil supplies by 4-5 million tonnes every year as the country is expanding its refinery capacity to meet growing consumption, Oil Minister S. Jaipal Reddy said on Thursday.

The BSE index, which fell 1.5 percent on Wednesday, is still up almost 17 percent since the end of December on the back of a sharp rise in foreign portfolio investment.

ICICI Bank (ICBK.NS) was among the leading losers, falling 1.4 percent on profit-taking. The lender, the country's second-largest bank, is still up nearly 38 percent in 2012.

Top lender State Bank of India rose as much as 3 percent after an official said the bank has not given further loans to debt-laden Kingfisher Airlines (KING.NS). However, it gave up most of the gains and ended up 0.2 percent.

Miner Sterlite Industries (STRL.NS) fell nearly 4 percent on media reports that India-focused miner Vedanta (VED.L) is considering a move to restructure its holdings in Sterlite and Sesa Goa (SESA.NS), potentially merging the two, dealers said.

The 50-share NSE index closed 0.4 percent lower at 5,483.3. In the broader market, losers outpaced gainers in the ratio of nearly 2:1 on heavy volume of more than 1.2 billion shares.

An initial public offer by Multi Commodity Exchange (MCX) to raise up to $134 million was fully covered on Thursday, the second day of the sale, indicating investors were shifting their money to new offerings.

The first IPO by an Indian company in 2012 is seen as a test of investor appetite for share sales after weak local markets forced many companies to shelve stock offerings last year.

Other offerings in the pipeline include follow-on share sale by state-run companies Oil and Natural Gas Corp (ONGC.NS), Steel Authority of India (SAIL.NS) and Bharat Heavy Electricals Ltd (BHEL.NS).

STOCKS THAT MOVED

* Bharat Petroleum (BPCL.NS) rose 5.2 percent on expectation of rising valuations of its Mozambique assets, dealers said.

* Bearing maker SKF India (SKFB.NS) fell 2.8 percent after the company said net profit for the December quarter was more than 8 percent lower than year ago period.

TOP 3 BY VOLUME

* Lanco Infratech (LAIN.NS) on 126 million shares

* Unitech (UNTE.NS) on 50 million shares

* Jaiprakash Associates (JAIA.NS) on 38 million shares