BSE Sensex
BSE SensexReuters

The BSE Sensex has fallen by over 1000 points in four trading sessions ending Monday, mainly due to fears that fourth quarter earnings may not reflect high growth as expected, even as analysts see an opportunity to buy at current levels.

The 30-share BSE Sensex closed at 27,886.21 on Monday, dropping 555.89 points or 1.95 percent, while the Nifty closed at 8448.10, down 157.90 points.

"Notably, the market weakness is along our expected lines, as we had anticipated some correction in the Nifty from the 8,800 levels, considering it was an intermediate hurdle. Notably, the Nifty had surged more than 550 points before the profit-booking set in," Hitesh Agrawal, Head Research, Reliance Securities, told The Economic Times.

However, analysts are not concerned about the sharp correction; instead they see a rebound once the benchmark indices reach their key support levels. 

"For large institutional investors, this is a good opportunity to kind of accumulate the stocks - the ones you wanted which you thought were at prices which were elevated," said Prasun Gajri, CIO, HDFC Life Insurance.

Experts say that the market will continue to focus on March quarter earnings to find its short-term direction.

Infosys, Hindustan Zinc, HCL Technologies, Wipro, Yes Bank, Cairn India, Ultratech Cements and HDFC Bank are scheduled to announce their quarterly earnings this week.

"Nifty has immediate support around 8500-8550 zone where it may take pause and in case of rebound, it may face resistance around 8750-8900 levels. All this indicates possibility of consolidation in index in a broader range," said Jayant Manglik, President-retail distribution, Religare Securities Limited.

Last week, Reliance Industries Limited (RIL), India's second largest company by market capitalization, announced record net profit of ₹6,381 crore in the March quarter, mainly driven by a healthy increase in refining margins.

Missing analysts' estimates for the third straight quarter, dollar-denominated revenues of Tata Consultancy Services (TCS), India's largest software firm, declined 0.8 percent to $3,900 million in the January-March quarter, while in rupee terms it fell 1.1 per cent to ₹24,219.8 crore.

"Clearly, the expectations from the result season have not been great and the first few large caps which have reported results failed to cheer markets. But I will be surprised if you see markets selling off significantly from the current levels because most of that already seems to be priced in," said Gaurav Mehta, VP -Institutional Equities, Ambit Capital.

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