Sensex edges down to three-week low on FII selloff

MUMBAI (Reuters) - The BSE Sensex and Nifty fell to their lowest level in nearly three weeks on Wednesday as stocks favoured by overseas investors such as ICICI Bank declined, following heavy foreign sales in derivatives and cash shares in the previous session.

Foreign investors sold index futures worth 28.17 billion rupees ($443.13 mln) and shares worth 15.71 billion rupees on Tuesday, signalling unwinding of long positions amid a selloff in global markets.

The Nifty slumped more than 3 percent in the previous session, posting its biggest daily loss since the rupee crisis in 2013 as a continued slide in oil prices hit emerging markets.

The benchmark BSE Sensex fell 0.29 percent to close at 26,908.82, while the broader Nifty ended 0.31 percent at 8,102.10.

Stocks favoured by overseas investors led the losses. ICICI Bank fell 2.7 percent, while Tata Motors lost 1.5 percent.

However, energy stocks gained. Reliance Industries , which lost 4.5 percent in the previous session, rose 2.2 percent, while Oil and Natural Gas Corp ended 1.5 percent higher. ONGC fell 5.7 percent on Tuesday.

(Reporting by Indulal PM; Editing by Prateek Chatterjee)