Benchmark stock indices slumped more than 2% on Monday to near four-month lows on rising concern about the risk that the Omicron variant of the coronavirus may pose to global economic activity and continued selling by foreign funds.
The S&P BSE Sensex tumbled 1,189.73 points, or 2.1%, to 55,822.01 points with stocks falling across the board. Top losers included Tata Steel (5.2%), IndusInd Bank (4.2%), SBI and Bajaj Finance, both of which lost almost 4%, and HDFC Bank.
The NSE Nifty 50 slid 371 points, or 2.2%, to 16,614.20.
“Markets reacted to the news of a sharp jump in the COVID cases globally, which may result in a lockdown,” said Ajit Mishra, VP - Research, Religare Broking Ltd. “Though the situation is under control domestically, at present, any impact on the global economic recovery would dent our prospects too,” he added.
“Besides, the continuous outflow of foreign funds was also weighing on sentiment. We reiterate our cautious view on markets and suggest focusing more on risk management,” Mr. Mishra added.
“India has been undergoing a phase of consolidation in the last 2 months,” said Vinod Nair, Head of Research at Geojit Financial Services. “The current sell-off is due to rapid rise in FII 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,” he added.
“We feel we are reaching the last phase of this consolidation in terms of price correction,” Mr. Nair remarked.
