NEW DELHI: Omicron, the new Covid variant which is considered much stronger than the delta variant, is expected to dictate India’s as well as global equity market this week after pulling down benchmark indexes- Sensex and Nifty50- by nearly 3% in a single session on Friday. This was one of the steepest falls India’s equity market experienced in 2021.
“Covid related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of Covid whereas restrictions-related news across the globe will also cause volatility,” said Santosh Meena, Head of Research, Swastika Investmart.
He adds that behavior of FIIs will also play an important role in the direction of our market because they are selling relentlessly for the last many days where they sold worth Rs 21000 crore in the cash market last week and if we look at Oct-Nov month data then they have sold more than Rs 50000 crore in the Indian market.
Similarly, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said that the new variant of Covid is presenting challenges in the form of lockdowns and travel bans. He added that apart from Covid related concerns, inflation remains a worry for countries across the globe. This, according to many experts, can force central banks of nations to increase interest rates, which is a big negative for share market.
“Inflation being a key factor will be at the centre of all news in the next two weeks since the RBI Monetary Policy Committee meet is scheduled in December. Further, a slew of listing flops in IPOs in the coming weeks could also indicate the slow drying up of liquidity from the markets in general. November monthly auto sales numbers can be a trigger to drive some movement in the coming week,” said Yesha Shah, Head of Equity Research, Samco Securities.
Sensex and Nifty lost more than 4% in the week ended November 26. When compared with the peck of October 19, the two indices have corrected more than 8%. This correction has wiped out investors’ wealth by `16 lakh crore in the same period. Nifty50 plunged 738.35 points to 17,026.45, while the BSE Sensex was down 2,528.86 points at 57,107.15. According to numerous market experts, the next major support for Nifty is now placed at 16500.
This fall from record high in just one month was bound to happen as valuations of India’s equity market even at present level seem overstretched.
Indian markets see fall from record highs
Sensex and Nifty lost more than 4% in the week ended November 26. When compared with the peck of October 19, the two indices have corrected more than 8%. This correction has wiped out investors’ wealth by `16 lakh crore in the same period.