Indian Market wrap: Sensex, Nifty Slip To Three-Month Low amidst new covid strain concerns

Indian Market wrap: Sensex, Nifty Slip To Three-Month Low amidst new covid strain concerns

Last updated: 26 Nov, 2021 | 04:17 pm

Indian Market wrap: Sensex, Nifty Slip To Three-Month Low amidst new covid strain concerns

On Monday, the benchmark indices ended with sharp losses. Both indices down 1.96%. 

The risk-off mood was triggered by fresh COVID-19 cases in Europe and lockdowns in countries like Austria. The dollar index climbing over 96 marks also spooked investors. Repeal of farm laws by the government, falling of Reliance-Aramco deal and the weak listing of Paytm also dented investors sentiment. However, the decline in crude oil prices is a positive for India, given the huge amount of imports in the country.

On Tuesday, domestic equity indices snapped a four-day losing streak and ended with decent gains. SBI Research upgraded India's GDP growth projection for financial year 2022 to the range of 9.3%-9.6% from its earlier estimates of 8.5%-9%. The projection comes as the country recorded only 11% increase in COVID-19 cases during the July-September quarter of 2021, second-lowest among the top 15 most affected countries. 

On Wednesday,  domestic equities reversed intraday gains and settled with sharp losses. The ongoing correction is triggered by heavy foreign outflows. So far in November, foreign institutional investors have sold Rs 17,915.33 crore in the domestic equity market.

On Thursday, the benchmark indices ended with strong gains on Thursday, boosted by strength in index heavyweight Reliance Industries. Trading was volatile due to expiry of monthly derivative contracts on the NSE.

On Friday, the stock market plunged with Nifty down by 2.9%. Revival of COVID threat, losses in Asian bourses, crude oil slump, and battered metals and financials lead to major fall in benchmark indices. 

Nifty 50 ended 4.1% down this week.

Top gainers and losers-

  • Selling pressure was widespread and all sectors barring pharma ended in red. 
  • Nifty Pharma was the only sector in green due to shifting focus on pharma stocks as covid cases rise.

Here is a quick recap of the market moving developments:

RBI disallows corporate entry into banks: The Reserve Bank of India has stayed away from allowing corporates to promote universal banks, a conditional recommendation made by an internal working group in 2020. The regulator has, however, accepted 21 of the 33 recommendations made by the group, among which is a proposal to raise the amount of stake to 26% of paid-up voting equity share capital, in the long run, from the current limit of 15% that private bank promoters can own. 

Active covid cases rise for the first time in 3 weeks: India's active caseload rose for the first time since Nov. 5 as the country reported over 10,000 new Covid-19 infections. As many as 10,549 people tested positive for the coronavirus in the last 24 hours. News of new covid variants in America and Europe also disturbed the markets. 

FIIs sold shares worth Rs 15,000 crore in the last 4 sessions alone: FIIs were a major seller this week. Seeing inflation go up in India and globally and the Fed facing pressure to taper faster is a major concern for them in the short term. New covid strains just put gasoline on the fire. 

That’s all for this week’s market wrap. We will be back with more interesting market insights in the next week!

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