Closing Bell: Sensex down 634 points to end at 59,465 levels and Nifty dropped 181 points to settle at 17,757

"If we look at the trend of last three years, then the market starts to correct between 15-20th January and then it witnesses post-Budget rally. A similar trend is visible for this year as well. However, I believe the market may witnesses recovery from here as we are near critical support levels. Nifty is trading near critical support of 176,50 which was the previous breakout level while 17,500 is another important support level. On the upside, 18,000-18,200 is an immediate resistance area. Above this, we can expect a move towards an all-time high. The texture of Bank Nifty is strong and it may outperform from here and I believe we can expect strong earnings by banking names," said a n expert.

The broader markets, however, outperformed their large-cap peers for a second straight day. The BSE MidCap index slipped just 0.07 per cent while the BSE SmallCap rose 0.05 per cent.

Among sectors, only the Nifty Metal index (up 0.5 per cent) and Realty index (up 0.2 per cent) ended in the green. The Nifty IT and Pharma indices, on the other hand, were the worst hit sectors, down 1.6 per cent each.