Sensex and Nifty, Indian stock benchmarks fell Monday as the rising number of Omicron Covid-19 cases had jeopardized economic recovery around the world. Sensex fell 1,434.03 points to reach 55,577.71 at its low for the day, while Nifty fell more than 2 percent to trade near the 16,600 mark. Indian investors lost Rs 11 lakh crore as the stock markets continued to witness a massive slump amid global sell-off.
Bajaj Finance and IndusInd Bank were the big losers. Bajaj twins lost 4.3 percent each while IndusInd Bank lost 3.8 percent. Axis Bank, SBI, Kotak Bank, HDFC Bank and HDFC all fell more than 3 percent each. In the broader markets, AU Bank and Bandhan Bank were the biggest losers, at 9 percent and 6.3 percent respectively. Tata Steel was the other big loser in the Sensex 30, followed by Mahindra & Mahindra, NTPC, Larsen & Toubro, ITC, UltraTech Cement. Nykaa, PolicyBazaar, Tega Industries, Tarsons Products and seven other recently listed stocks hit new lows on December 20. The BSE Midcap and Smallcap each fell more than 3 percent.
Global Market Crash:
Several parts of Europe had announced new lockdowns to prevent the spread of Covid-19 during the rise of the Omicron variant. The Netherlands had put in place a lockdown before Christmas. The number of new Covid-19 cases reached 90,418 in the UK on December 19, after days of record highs. This rapid increase in Covid-19 cases has made investors nervous.
Shares in other Asian markets fell amid fears at Omicron. MSCI’s broadest index of Asia-Pacific stocks outside of Japan fell 0.9 percent at last count. Japan’s Nikkei 225 fell 1.7 percent, China’s Shanghai Composite 0.8 percent and Hong Kong’s Hang Seng 1.3 percent. South Korea’s KOSPI fell 1.5 percent and the Singapore Straits Times fell 1 percent.
The three major Wall Street indices fell amid fears at Omicron last week. Gains in technology stocks, however, provided some support, limiting Nasdaq Composite’s loss to 0.1 percent. The S&P 500 and the Dow Jones closed 1 percent and 1.5 percent lower, respectively, on Friday.
Sensex is down more than 2%. What investors should do now
“Last week there was a nearly 3 percent correction due to several factors, such as the Bank of England rate hike, the continued increase in Omicron cases worldwide and FII sales. All sectors faced the heat of the market correction that could continue for quite some time, as global signals suggest. Though there will be some good action in the primary market in the coming week as five IPOs will debut and India’s largest cash management company CMS Info System will open its IPO subscription this week. On the technical side, the immediate support and resistance for Nifty50 is 16,700 and 17,250 respectively. In the case of Bank Nifty, the 35,000 and 36,450 levels will act as support and resistance,” said Mohit Nigam, Head – PMS, Hem Securities ahead of the market opening on Monday.
Speaking to investors, Manish Hathiramani, in-house index trader and technical analyst, Deen Dayal Investments, said: “Friday’s lows were a ray of hope, but the index opened this morning with a gap down, confirming the validity of a downtrend. The uptrend The index has been capped for the time being and any rise can be used to short this market to a target of 16,400.”
Rupee tumbled too
“The rupee also fell against the US dollar as the Omicron affairs had threatened the economy. The US dollar was seen trading with small gains against the basket of currencies in Asian trading this Monday morning. Technically, if the dollar index trades above the USD 96.50 levels, it could see bullish momentum as far as USD 96.80-$97.10 levels. The support zone is at the $96.40-$96.12 levels. The euro, sterling and yen were flat on Monday morning,” said Sriram Iyer, senior research analyst at Reliance Securities.
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