"The broader market witnessed volatility, underscoring caution on account of Q4 earnings and general election uncertainties, which led investors to stay on the sidelines. We expect the trend to continue in the short term as the market slid below the physiological level of 22,000 (for Nifty)," said Vinod Nair, Head of Research, Geojit Financial Services.

Nair added that the global indices are trading with mixed cues ahead of the Bank of England policy meeting later on Thursday and US inflation figures due next week.

India VIX, which reflects volatility and investors' sentiments in the market, again hit a fresh 52-week high of 19.17 before closing 6.56% higher at 18.20. It has gained for the eleventh consecutive session and is now up 88% from April lows.

"The Volatility Index is also creating some uncertainty among traders and investors. Technically, Nifty has support in the 22,000-21,700 zone. An oversold market suggests a potential bounce around this level. However, for a more significant upward move, Nifty needs to break above the 22,500 resistance level," said Meena.

Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS, believed the market correction was driven by a mix of multiple factors.Surat Investment

"At this juncture, we believe that the markets continue to anticipate a stable political regime will ensue. However, it is also important to note that the fiscal year has started on a relatively high base of FY24. Earnings season has been in line with expectations, yet it hasn't spurred noteworthy upgrades in earnings forecasts. Global market conditions continue to remain a mixed bag at best. The markets factored in most of the positives from December 2023, so a modest correction seems warranted," added Kulkarni.

He said the correction is healthy and not primarily driven by pre-election result jitters.Lucknow Wealth Management