Benchmark stock market indices slumped over 2% on Monday owing to fears of the Omicron variant of Corona virus gripping the global economic and FIIs unwinding their positions to book profit.
The S&P BSE Sensex plunged 1,189.73 points or 2.09% to 55,822.01 points. The fall was across the board and the top Sensex losers included Tata Steel down 5.20%, IndusInd Bank down 4.23%, SBI down 3.97%, Bajaj Finance down 3.89% and HDFC Bank down 3.14%.
The NSE Nifty-50 index too slumped 371 points or 2.18% to 16,614.20.
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The fall was to the extent of 3% at both the exchanges during intraday trade. However, rebound in the select index majors pared some losses in the latter half.
At the current level the indices have touched 4 months low analysts said.
Vinod Nair, Head of Research at Geojit Financial Services said, “India has been undergoing a phase of consolidation in the last 2 months. Currently sell-off is due to rapid rise in FIIs selling triggered by hawkish world central banks’ policy, cautious view on Indian market due to high valuation compared to peers and drop in retail inflows.”
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“We feel that we are reaching the last phase of this consolidation in terms of price correction. Some pockets have become fair however the overall market is still trading at the upper-hand which will continue to affect the performance of broad market, in the short-term,” he said.
Mr. Ajit Mishra, VP - Research, Religare Broking Ltd said, “Markets reacted to the news of a sharp jump in the COVID cases globally which may result in a lockdown. Though the situation is under control domestically at present, any impact on the global economic recovery would dent our prospects too.”
“Besides, the continuous outflow of the foreign fund was also weighing on the sentiment. We reiterate our cautious view on markets and suggest focusing more on risk management,” he added.