Bears Tighten Grip Over D-Street, Sensex Tanks 1,200 Points, Nifty Trades Below 16,550 On Omicron Fears

Of the 30 Sensex constituents, 25 were in the red, led by Tata Steel, Bajaj Finance, and SBI. On the flipside, Dr Reddy's Labs, Sun Pharma, Wipro, TCS, and Power Grid were the only gainers

New Delhi: The steady spread of Omicron variant of coronavirus has rattled investors’ sentiment as they suffered heavy losses in early morning trade on Monday.   

The key domestic equity benchmark Sensex crashed over 1,200 points, tracking across-the-board losses amid a selloff in global markets, while the Nifty 50 index dropped below its important psychological level of 16,550, down 396 points.
Out of the 30 Sensex constituents, 25 were in the red, led by Tata Steel, Bajaj Finance, and SBI. On the flipside, Dr Reddy's Labs, Sun Pharma, Wipro, TCS, and Power Grid were the only gainers with up to 0.4 per cent rise.

The 30-share index slumped 1,028.61 points or 1.80 per cent to 55,983.13 in the opening trade. Similarly, the Nifty tanked 307.50 points or 1.81 per cent to 16,677.70.

In the broader markets, the MidCap and SmallCap indices around 2.5 per cent each. 

Persistent foreign fund outflow too weighed on investor sentiment.

On the other hand, Sun Pharma was the sole gainer. In the previous session, the 30-share equity benchmark had ended 889.40 points or 1.54 per cent lower at 57,011.74. Similarly, the NSE Nifty had plunged 263.20 points or 1.53 per cent to 16,985.20. 

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,069.90 crore on Friday, according to stock exchange data.

Rising inflation, hawkish central banks, exploding Covid-19 cases, sustained selling by FIIs and slowing growth momentum in the developed economies combined to produce the perfect storm that spooked the markets last week, said V K Vijayakumar, Chief investment Strategist at Geojit Financial Services.

“These negative factors persist, causing concerns about further downtrend in the market, particularly if FIIs continue to sell. But negative sentiments are unlikely to last long. Omicron variant, though fast spreading, has not proved to be highly virulent as feared. Also, FIIs will turn buyers soon when valuations become attractive,” he noted.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with heavy losses in mid-session deals as concerns over resurgence of Covid-19 cases battered global sentiment.

The spread of Omicron saw the Netherlands go into lockdown on Sunday and put pressure on others to follow, though the United States seemed set to remain open.

Meanwhile, international oil benchmark Brent crude fell 2.45 per cent to $71.72 per barrel.