Indian equities crashed in line with global markets today, as concerns over a coronavirus variant in South Africa roiled investor sentiment. The European Union proposed a suspension of air travel from Southern Africa and resulted in a blood-bath in global markets.
Sensex ended 1,687 points lower at 57,107 and Nifty lost 509 points to 17,026 at home. The last trading session of the week saw investors lose 7.45 lakh crore.
The market cap of BSE-listed firms fell to Rs 258.21 lakh crore against Rs 265.66 lakh crore in the previous session.
As a new coronaviruses variant sparked concerns, stock markets nosedived across the globe on Friday, heading for their largest weekly drop in almost two months, according to Deepak Jasani, head of retail research at HDFC Securities. A new, more transmissible variant of COVID 19 has been identified in South Africa and later detected in Hong Kong, according to the 1.1529 strain reported to contain up to 30 identified mutations. The scare sent investors rushing to the safety of bonds, the yen and the Swiss franc.
The reaction appears to be outsized due to the thin liquidity levels in Asia trading as a result of the US holiday. IndusInd Bank, Maruti, Tata Steel, NTPC and Bajaj Finance were the top Sensex losers, falling to 6.01%. Dr Reddy's, Nestle India and Asian Paints were the only Sensex gainers, rising up to 3.35%. The BSE mid-cap and small-cap indexes fell 828 points and 751 points, respectively.
The market's breadth was negative with 1,067 shares ending higher against 2244 stocks in the red. 104 shares were unchanged.
The new variant of Covid is presenting challenges in the form of travel bans and lock downs, according to Shrikant Chouhan, Head of Equity Research Retail Kotak Securities. Inflation remains a concern for countries across the globe because of the concerns of Covid. The FIIs have net sellers this week. Equity markets will be closely followed by the impact of the new covid variant, inflation data, and Central Bank policies in the near term. On the sectoral front, metal, capital goods, consumer durables, banking and auto stocks led the losses today.
BSE consumer durables index fell 1,522 points to 41,920, BSE capital goods lost 1011 points to 27,058, auto index closed at 24,330, metal index fell 1,058 points to 18,703 and BSE bankex declined 1,512 points to 41,117.
The healthcare index of the BSE rose 298 points to 25,626, the only gainer among the 19 BSE sectoral indexes.
The Indian market closed higher on Thursday, backed by gains in index heavyweight Reliance Industries, amid a positive trend in global markets. Sensex ended up 454.10 points higher at 58,795 and Nifty increased by 121 points to 17,536. Reliance Industries was the top Sensex gainer with over 6 per cent, followed by ITC, Infosys, Tech Mahindra, Titan, Bharti Airtel and PowerGrid.
Foreign institutional investors FIIs sold shares worth Rs 2,300 crore on November 25, and domestic institutional investors DIIs bought shares worth Rs 1,367 crore, according to provisional data available on the NSE.
London's FTSE fell by an unusually wide margin of 3.3% at the opening and Tokyo lost 2.5%. Shanghai, Frankfurt and Hong Kong also declined.
The DAX in Frankfurt fell 3.3% to 15,391 and the CAC in Paris fell 4% to 6,789. In Tokyo, the Nikkei 225 declined to 28,751. The Hang Seng fell 2.7% to 24,080 in Hong Kong. The Kospi in Seoul lost 1.5% to 2,936. 44 and Sydney's S&P-ASX 200 fell 1.7% to 7,279.