* Stock market falls for third consecutive session
* Reforms seen in danger after Congress poll failure
* Index bellwether Reliance Inds falls 1.9 pct
* Retailers, oil companies slip after election (Updates to close)
By Henry Foy
MUMBAI, March 7 (Reuters) - Indian shares fell for a third straight session on Wednesday, led by market bellwether Reliance Industries, as a poor election result for the country's ruling Congress party appeared to pour cold water on an already-struggling reform agenda.
The Congress' flop at the ballot box in Uttar Pradesh, India's most politically vital state, has hit hopes of renewed efforts to re-launch reforms and reverse a slowdown in growth, as the markets await the annual budget this month.
"The market has lost quite a lot of value and today we saw that it is largely confused on the trend going forward, as we look towards the budget next week," said Deven Choksey, chief executive officer at K R Choksey Shares and Securities in Mumbai.
India is set to unveil the annual budget on March 16, and investors will look for commitment on a string of key economic reforms from a government that has been hamstrung by corruption scandals and coalition dissent over the past year.
The benchmark 30-share BSE index closed down 0.16 percent at 17,145.52, with all but 13 of its components in the negative territory.
The index, which fell a combined 2.63 percent on Monday and Tuesday to hit its lowest close in more than five weeks, has slipped 7.0 percent since Feb. 21, when it hit its highest close in nearly seven months.
Oil and gas conglomerate Reliance, India's most valuable company by market capitalisation, closed down 1.9 percent at 761.80 rupees ($15).
Reliance, controlled by the country's richest man Mukesh Ambani, has lost over 12 percent since a high in early February after the cash-rich company announced it would open a share buy-back.
Shares in state-run oil marketing companies also fell on rising global oil prices and fears that a long-awaited hike in fuel prices would be delayed in the political aftermath of the Congress' performance in Uttar Pradesh.
Hindustan Petroleum Corp ended 4.2 lower at 298.60 rupees, while Bharat Petroleum Corp closed at 659.35 rupees, down 1.4 percent. Indian Oil Corp fell 2.6 percent to end at 272.90 rupees.
Investor sentiment was also muted by negative headwinds overseas, as global markets fell on renewed uncertainty over Greece's bailout and mounting worries about slowing global economies.
The MSCI's broadest index of Asia Pacific shares outside Japan was down 0.82 percent at 3:40 p.m. (1010 GMT), while the benchmark indexes in Japan and South Korea ended down 0.64 and 0.91 percent, respectively.
India's 2012 rally has been helped by strong foreign fund inflows of over $7.2 billion into equities since Jan. 1, data from the Securities and Exchange Board of India showed.
Retailers extended falls for a second day after the state election results were seen further scuppering plans to open up the country's retail sector to foreign supermarkets.
Pantaloon Retail dropped 3.3 percent to close at 155.25 rupees, while Shopper's Stop shed 3.7 percent to end at 324.85 rupees. The Tata Group's retail unit Trent closed at 903.30 rupees, a fall of 0.6 percent.
Carmakers, which have suffered over the past few quarters as economic growth has slowed, also lost value on Wednesday.
Maruti Suzuki, India's top carmaker, ended the day down 1.7 percent at 1,308.55 rupees. Utility vehicle maker Mahindra & Mahindra shed 0.9 percent to close at 674.90 rupees.
The 50-share NSE index closed down 0.04 percent at 5,200.45.
In the broader market, losers outnumbered gainers by a ratio of around 2:1, on a volume of about 769 million shares.
STOCKS ON THE MOVE
* Zuari Industries fell as much as 2.0 percent after Indian fertiliser companies said on Tuesday that they had deferred imports of over 2 million tonnes of potash on low demand.
* Hero MotoCorp rose as much as 1.3 percent after the Hindu Business Line newspaper reported on Wednesday that India's top motorcycle maker would spend 12 billion rupees ($238 million) on a new factory.
* HCL Technologies, India's No. 4 software services provider, rose as much as 3.2 percent after the company said it had won an outsourcing order from Finland's UPM-Kymmene Oyj.
TOP 3 BY VOLUME
* Lanco Infra on 55.6 million shares
* Unitech on 29.7 million shares
* Jaiprakash Associates on 28.1 million shares
FACTORS TO WATCH * Indian rupee report * Indian bond report * Euro steadies, seen vulnerable on Greece uncertainty * Oil rebounds on China demand outlook * Euro, shares stabilise, risk aversion high * US stock futures point to higher Wall St open * Foreign institutional investor flows * For closing rates of Indian ADRs (Editing by Aradhana Aravindan)
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