The Indian market remained under pressure for the fourth consecutive session on April 18 on the back of uninspiring quarterly earnings, elevated geopolitical tensions and soaring inflation.
Equity barometer Sensex opened lower and traded lower throughout the session eventually closing 2 percent lower.
Sensex closed 1,172 points, or 2.01 percent, lower at 57,166.74 with 20 stocks in the red while the Nifty lost 302 points, or 1.73 percent, to settle at 17,173.65.
NTPC, Tata Steel, Maruti, Titan and Hindustan Unilever ended as the top gainers in the Sensex index. On the flip side, Infosys, HDFC, HDFC Banks, Tech Mahindra, Wipro and TCS ended as the top laggards.
BSE Midcap and Smallcap indices closed 0.95 percent and 1.01 percent lower, respectively. Among the sectors, BSE IT and Teck plunged 4.76 percent and 4.60 percent, respectively. On the other hand, power and utilities indices rose about 2 percent each.
The overall market capitalisation of BSE-listed firms dropped to ₹269.5 lakh crore from ₹272 lakh crore in the previous session on April 13, making investors poorer by ₹2.5 lakh crore in a single day.
"Unfavourable start to earnings season in heavyweight stocks of IT and banking sector led to heavy sell-off. Lower-than-expected results prompted the market to worry about the headwinds faced by the IT sector like attrition, wage inflation, lower utilisation, and cut in IT spending by industries due to geopolitical and macro issues. The degree of downfall is high because the sector was trading at high valuation and risk of a downgrade in outlook has increased," said Vinod Nair, Head of Research at Geojit Financial Services.
Crude oil traded above $110 per barrel while the rupee ended 9 paise lower at 76.27 per dollar.
"Markets started the week on a muted note, in continuation of the prevailing consolidation phase and ended the session with a sharp loss of nearly two percent. After a gap-down opening amid weak global cues, the benchmark continues to trade with negative bias throughout the day. Also, lower than expected results from heavyweights like Infosys and HDFC Bank impacted sentiments," said Ajit Mishra, VP - Research, Religare Broking.
"We believe global cues, as well as the outcome of Q4 earnings, will continue to add volatility in the coming sessions. Hence, we would remain cautious on the markets and suggest traders keep their position hedged," added Mishra.
Some analysts believe that the valuation of the market is low now and the correction should be used to add quality stocks.
"Post the close to 2 percent fall in the markets today, the one-year year forward P/E multiple now stands around 20 times which is a fair valuation level. If we see further dips this week, we believe sentiments would sour further and risk averseness would go up considering the fact that the result season has not started off on a good note. Nonetheless, we suggest slow and steady buying of the dips, especially for long-term investors and not shy away from the market entirely," said Vineet Bagri, Managing Partner- TrustPlutus Wealth.