Mumbai, April 10: The Sensex and Nifty fell sharply today as investors traded with caution ahead of the fourth quarter earnings season and Lok Sabha elections. Sentiment was also subdued after the International Monetary Fund (IMF) lowered global economic growth outlook. On Tuesday, the IMF reduced its global economic growth outlook by 0.2 percentage points to 3.3%, citing the US-China trade war and a potential disorderly British exit from the European Union as key risks. It also warned of high chances of further cuts to the outlook.

The Sensex ended 353 points lower at 38,585 while Nifty settled at 11,584, down 0.75%. Losses in financials also weighed on the main board, with the Nifty Bank index falling over 1%.

“While India maybe among the fastest-growing economies of the world, a slowdown in global growth would definitely hurt (the markets) along with factors like higher crude prices,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.

“Strong FII inflows over the last couple of months, which lifted domestic markets, could reduce and we could also see profit-booking.”

Among the Sensex stocks, HDFC twins, TCS, Asian Paints and Bharti Airtel were among the top losers. HDFC Bank, HDFC, TCS and Asian Paints fell nearly 2% each while Bharti Airtel lost 3%. TCS and Infosys kick of the fourth quarter earnings season when they report earnings on Friday.

Research firms Nomura and Jefferies forecast a weak quarter for Indian auto and oil and gas companies, citing weak volume growth and refining/petchem margins. Nomura is optimistic on the pharmaceutical sector, saying prescription volumes have increased for most companies year-on-year. The Nifty pharma index rose 0.80%.

“Nifty has been consolidating in a narrow range of 11,550-11,700 since the past few trading session. In the short term, a breach of 11,550 could push the index towards 11,300-11,350 levels. We advise accumulating on meaningful corrections for the larger trend which remains extremely strong,” said Sahaj Agrawal, head of research for derivatives at Kotak Securities.

The broader markets however did not witness intense selling pressure. The BSE midcap index fell 0.33% while the smallcap index ended flat. (With Agency Inputs)

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