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Markets regain some lost ground after worst decline in seven months

The gains were capped as the impact of the new variant on the economic recovery and central bank policy action remained uncertain

Sensex | Investors | Nifty

BS Reporter  |  Mumbai 

Photo: Bloomberg
Photo: Bloomberg

Domestic regained some ground following their worst drop in seven months as assessed the threat of the new coronavirus variant Omicron. The gains were capped as the impact of the new variant on the economic recovery and central bank policy action remained uncertain.

After dropping as much as 724 points in the opening trade, the recovered sharply to trade in the green for most part of the day. Positive global cues helped market stay in the green albeit marginally. Consistent selling by global funds continued to weigh on performance.

In intra-day trade, the had declined to a two-month low of 56,383. The index, however, ended the day at 57,260 with a gain of 153 points, or 0.27 per cent. After dropping to a low of 16,782, the 50-share managed to close at 17,053.95 with a gain of 27.5 points, or 0.16 per cent.

On Friday, both the indices had dropped close to 3 per cent each as the new coronavirus variant rattled world and led to sharp drop in oil prices.

In a sign of improved in risk appetite, oil prices staged a rebound and safe-haven assets such as government bonds and gold took a breather.

were torn between buying on dips and the uncertainties over the impact of Omicron on economic recovery,” said Vinod Nair, Head of Research at Geojit Financial Services.

The latest bout of selling in the global triggered by the Omicron variant has come at a time when sentiment towards the domestic markets had already turned weak amid concerns around expensive valuations and earnings growth pressure.

“The new covid-19 variant adds to the uncertainty, we expect more clarity to emerge in the next few weeks as additional data come out,” said Motilal Oswal Financial Services (MOFSL) analysts Gautam Duggad and Jayant Parasramka in a note.

The benchmark and the are down nearly 8 per cent from their peaks hit on October 18.

The correction, MOFSL analysts, was “led by global factors such as Fed’s taper announcement, rising bond yields, higher crude oil prices, and strengthening of the US dollar. A big fundraise in the primary market also put some pressure on the secondary market.”

Last week, overseas funds had dumped stocks worth over Rs 23,000 crore. On Monday, FPIs took out another Rs 3,332 crore.

Market players say until the selling by foreign fund abates the market may not climb higher.

Despite the market closing in the green, the declining stocks (2,471) far outperformed advancing stocks (937) on the BSE. Only 13 of the 30 Sensex stocks ended in the green. Kotak Mahindra Bank gained the most at 2.92 per cent, followed by HCL Tech (2.25 per cent) and TCS (1.6 per cent).

Sun Pharma (-2 per cent), NTPC (-1.7 per cent) and Axis Bank (1.65 per cent) fell the most. Only 6 of the BSE 19 sectoral indices gained. The IT index gained the most at 0.67 per cent, while power stocks dropped the most.

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First Published: Mon, November 29 2021. 18:25 IST