The outbreak of the Omicron variant and the WHO classifying it as ‘a variant of concern’ has introduced a new element of uncertainty over global growth and markets. The sharp global market correction on Friday reflects this uncertainty and fear, said analysts.
“Risk-averse investors can move to defensives like pharma and FMCG which will be resilient in these difficult times. Investors with a high risk-appetite can consider calibrated buying in high quality banking and IT stocks,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the red, benchmark indices pared losses. At 9.37 am, BSE flagship Sensex was down 80 points or 0.14 per cent to 57,027. NSE benchmark Nifty dropped 49 points or 0.29 per cent to 16,977.
“On the technical front, the key resistance levels for Nifty50 are 17,259 followed by 17,429 and on the downside 16,889 followed by 16,752 can act as strong support. Key resistance and support levels for Bank Nifty are 36,628 and 35,663, respectively,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Reliance Industries was the biggest gainer, up 2.38 per cent. Cipla, IndusInd Bank, Dr Reddy’s Labs, HCL Tech, Bharti Airtel, Hindalco Industries and Tata Steel were among other gainers.
Adani Ports was the top loser in the pack, down 2.02 per cent. Hero MotoCorp, ONGC, Coal India, UPL, Indian Oil, Bajaj Auto, Shree Cement and HDFC were among those that traded in the red.
FACTORS DRIVING MARKETS
Blessing in disguise?: Some analysts are drawing comfort from a report that a South African doctor who had treated cases said symptoms of Omicron were so far mild. They hope if this becomes the dominant strain replacing the Delta variant, it will in fact be better.
Dollar firm: Currency markets calmed on Monday in Asia after the initial shock of the discovery of the Omicron coronavirus variant sent investors scurrying for cover last week, but analysts warned of more volatility with little still known about the new strain. However, the dollar index still traded above 96-level.
Broader markets
Broader market indices were trading lower, underperforming their headline peers in morning trade. Nifty Smallcap was down 2.77 per cent, while Nifty Midcap declined 1.29 per cent. Broadest index on NSE, Nifty 500, was down 0.79 per cent.
Pfizer, Alkem Laboratories, Escorts, Astrazenaca, Indiabulls Housing Finance and Welspun India were gainers from the space while Rossari Biotech, Sunteck Realty, KEI Industries, RBL Bank, Prestige Estates and IRCTC were under selling pressure.
Global markets
Asian markets were mostly mixed in early trade as the spread of the Omicron variant in developed nations threatened to derail economic recoveries and the tightening plans of some central banks.
MSCI’s index of Asia-Pacific shares outside Japan was up by 0.06 per cent. Japan’s Nikkei advanced 0.04 per cent. South Korea’s Kospi fell 0.35 per cent. New Zealand’s DJ gained 0.31 per cent. China’s Shanghai added 0.02 per cent. Hong Kong’s Hang Seng fell 0.34 per cent.
