Stocks nosedived on Tuesday for the second time in less than a week, revealing the nervous mood in the market. The 30-share Sensex crashed 629.82 points or 2.3 percent at 26877.48 after touching a low of 26837.39 intra-day. The Nifty shed 198.30 points or 2.38 percent to close at 8126.95. Brokers said local traders were wary of buying at higher levels as foreign institutional investors do not appear too bullish at the moment. Today’s sell off was widespread with every single sectoral index closing in the red. Worst hit were shares from the capital goods, banking, oil & gas, power, realty and auto sectors. About 772 shares advanced, 1943 shares declined, and 147 shares were unchanged. Big losers in the Nifty were Bank of Baroda, Tata Steel, Cairn India, Vedanta and BHEL. Gaining over 3 percent each, Dr Reddy’s Labs and Hero MotoCorp were top gainers in the Nifty. The Sensex had plunged 838 points in two sessions last week, and then rallied 906 points in the next two sessions, leading many market experts to believe that the worst was behind. But as today’s fall shows, fundamental concerns could cap gains near term even if the downside appeared limited. Rising crude prices, likelihood of the US Fed hiking rates, Greece-led problems in the Eurozone, and back home, erratic rainfall and a slower than expected economic recovery are some of the hurdles for the bulls. Brokers say players will now be closely watching technical indicators to form a near term view. After hitting record highs in early March this year, indices have been on a downtrend, making lower highs on each rebound and lower lows on each correction. The Nifty briefly fell below 8000 in intra-day trade last Thursday, but managed to end the day above that mark. Technical analysts say if the index again falls below 8000 and fails to close above that mark, it could trigger a fresh wave of selling from traders tracking charts. The government’s decision to soften its stance on the tax demands on FIIs provided briefly boosted sentiment on Monday. But market experts said the random tax demands were undermining foreign investor confidence at a time when concerns about economic recovery and earnings growth remained. Experts tracking fundamentals, however, say the recent correction is a good opportunity to start buying again. “I am positive on the earning outlook for FY16 because if you look at the base, it is extremely low,” said Prabodh Agrawal, president and head of research at IIFL Institutional Equities in an interview to CNBC-TV18 today. “There are several industries where the EBITDA margins are at a multi-year or at a ten year low, for example material or utilities or industrials or consumer discretionary. There is scope for gradual margin expansion in all these sectors,” he said. BofA Merrill Lynch’s Ajay Kapur feels India is at a cyclical low and investors need to be patient as the policies of the new government will take time to show results. He said one of the reasons for the recent weakness in stock prices was many funds shifting their money into China’s stock market. Most corporate earnings for the March quarter were disappointing, and some bankers caution the economic recovery could be slower than expected. “There is considerable pain still left in the economy,” Ranjan Dhawan, Managing Director and CEO of Bank of Baroda told CNBC-TV18 in an interview after announcing the fourth quarter numbers. “Most of our major clients are still not out of the woods. They have serious liquidity issues,” he said.