NEW DELHI: After rallying nearly 200 points, the S&P BSE Sensex reversed gains and ended 1.2 per cent lower on Thursday, led by losses in ITC, L&T, ICICI Bank and Reliance Industries.Tracking the momentum, the 50-share Nifty witnessed a sharp sell-off in the afternoon trades. The reasons highlights by analysts are varied from profit-booking to basket selling.Apart from the above-given reasons, analysts see populist measures adopted by Aam Adami Party (AAP) and the Congress-led government in Maharashtra considering a cut in power rates playing on market sentiment.They say if the measures pick up momentum ahead of elections it would put further strain on the fiscal deficit.The Nifty fell below its 20-day average and registered its worst percentage fall since November 21, 2013 or nearly 1-1/2 months. Analysts are advising traders to get out of longs and initiate fresh short positions.“There is obviously some kind of basket selling and it is the return of the FIIs after a lull. I do not think there is any fundamental (reason to it),” said Jagdish Malkani, Member, NSE.“There is a possibility that some of the FIIs are rattled by some of the populist measures what Delhi has started in power and water and now Maharashtra is carrying the clarion call and if this kind of populist moves gather steam before the election then obviously somebody is getting rattled,” he added.Malkani is of the view that these populist measures will result in more subsidy burden on the government. However, all I can ascribe as to that but it is still too early to panic but I am just reading between the lines, he clarifies.The 50-share index closed at 6,221.15, down 80.50 points or 1.28 per cent. It touched a high of 6,358.30 and a low of 6,211.30 in trade today.The S&P BSE Sensex finally ended at 20,883.33, down 252 points or 1.19 per cent. It touched a high of 21,331.32 and a low of 20,846.67 in trade today.A K Prabhakar, Independent Market Expert is of the view that AAP effect is certainly taking a toll on markets. Also, Manmohan Singh will hold a press conference at 11 am on January 3 so markets are trading cautiously ahead of the event.AAP’s populist measure if picks up steam ahead of elections elsewhere in India, may not auger well on the growth front as increase in subsidies will strain already stretched balance sheet of the government (fiscal deficit).On technical front, most analysts are attributing the fall to profit booking at higher levels and next support for the index is placed around 6,150 levels.“This (market fall) is a very clear case of a profit booking and I don’t think it will stop anytime soon. The speed, the momentum at which the prices have fallen in some of the stocks suggests that there is some more downside certainly,” said Sandeep Wagle, Founder & MD, APTART Technical Advisory Services.“Now I would cap it (downside) at 6,150 levels which is another probably 100-110 points lower which if it holds, then I would talk of the Nifty range of 6150 to 6350,” he added.In case Nifty fails to sustain 6,150 levels, Wagle is of the view that we may go down all the way to 6000-5980.Nidhi Saraswat-Senior Research Analyst, Bonanza Portfolio Ltd is of the view that markets witnessed profit-booking at higher levels, amidst concerns over economic sustainability in the country and political uncertainties ahead of elections time are likely reasons for the fall today. Global markets were also trading soft which also weakened market sentiment.“Today survey from HSBC also indicated that manufacturing sector in December was weaker due to lower demand and sluggish growth,” added Saraswat.Sell on rallies or buy on dips?So, how should investors approach markets? Should they become sellers or buy markets on dip?Well, according to analysts, any dips should be used to enter markets and investors should look at accumulating quality stocks.“My personal sense is about 3-5 per cent on Nifty which could easily lead to a much bigger correction on in terms of number of stocks which could be in the range of 8% to 10%,” said Vinay Khattar, Head Research (Individual Clients), Edelweiss Financial Services Ltd.“It could be good re-entry levels for people who have missed the rallies and for stocks which lot of people found there was quality but the run up was very significant and very sudden so they were unable to participate,” he added.Khattar is of the view that once you start getting some (quality stocks) of these ideas at lower valuations and lower numbers, one should seriously look at it for accumulating.