Monday anarchyRs 132,859 crore market capitalisation lost by Sensex firmsRs 660.3 crore – Shares sold by FIIsRs 469.55 crore-- bought by DIIs41 stocks out of 50 Nifty declinedWeak corporate earnings and exit poll results of Delhi elections led to a sharp plunge on the bourses with the Sensex tanking 490.52 points (-1.71%) to 28,227.39 and Nifty 134.70 (1.56%) to end the day at 8526.35.

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Out of the Nifty 50 stocks, 41 stocks declined while nine stocks advanced. Among the losers, CNX Infra, led the pack falling 3.69% followed by CNX PSU bank (3.48%) and CNX Metal (2.65%) and CNX realty (2.55%) indices.

The Sensex listed companies lost Rs 132,859 crore market capitalisation in Monday's market fall.

Dismal trade data from China, the uncertainties related to Greece and the issues of paper from the government as well as India Inc has led to a rise of negative sentiments surrounding the markets.

FIIs sold shares to the tune of Rs 660.3 crore while domestic institutional investors were net buyers at Rs 469.55 crore.

The Larsen & Toubro results released on Monday where way below expectations, disappointing in both topline as well as bottomline. Its shares fell 6.6% on Monday session, dragging the CNX Infra down 7.44% to 1558.35 points.

The asset quality concerns of the PSU banks and ICICI Bank weighed heavily on the Bank Nifty, rubbing off on the broader indices.

Chandan Taparia, derivatives and technical analyst, Anand Rathi Securities, said the volatility in the market has increased significantly since January 2015, thus increasing the downward risks.

India VIX, the index which measures the volatility, has moved up to 22 levels from 15 in January. The rise in volatility post a bull run indicates increasing downward risks, experts said.

The FIIs had bought shares worth Rs 13,000 crore in mid January which led to a liquidity infused bull run, but in the February series, FIIs have been selling, leading to a fall." Taparia said.

The Chinese trade data reported a 19.9% drop in imports while exports fell 3.3%, leading to a fears of slowing growth in China.

Ambareesh Baliga, market analyst, said China will increase its exports to get out of the slowdown, and dump goods in countries like India, impacting Indian companies negatively.

Sahil Kapoor, head, technical research, Edelweiss Financial services, said the index would correct another 100 to 150 points in the next few days.

"8400 will be a reasonable levels for investors to start buying," he said.

Market observers said a positive sentiment will drive markets leading to a pre-budget rally, starting next week led by cyclicals which have historically been outperformers before the budget.

Rajiv Mehta, AVP-Research, IIFL, said in anticipation of the government incentivising private capital expenditure, sectors like private banks, infrastructure, cement, EPC players and railways will see a run up before the budget."