The 30-share BSE index fell 1,190 points, or 2.09 per cent, to end at 55,822; while the broad NSE Nifty It closed at 16,614, down 371 points or 2.18 per cent.
Tata Steel, SBI, IndusInd Bank, Bajaj Finance and HDFC Bank were the major losers, falling 5.2 per cent in the Sensex pack. Twenty-eight out of 30 stocks ended in the red.
While HUL and Dr Reddy’s made only two gains.
All sub-indices ended lower on the NSE platform with Nifty Realty, PSU Bank and Metal stocks falling up to 4.9 per cent.
However, following the overall market trend, shares of Future Group companies surged nearly 20 per cent after the Competition Commission of India (CCI) suspended Amazon’s 2019 deal with the group, potentially leading to a loss of Reliance Retail. Buying Future’s retail business just got easier.
Shares of Shriram Properties, on the other hand, started with the listing of shares at a discount of 24 per cent on the BSE.
The major reasons for today’s decline are as follows:
*Omicron’s growing case
Investor sentiment was buoyed by concerns over rising Omicron cases around the world, which have the potential to derail the global economic recovery.
The total number of Omicron cases in India rose to 160 as of 3.30 pm today. Overall, 11 states and union territories have been detected with this type, with 54 cases being reported from Maharashtra alone.
The US government also warned its citizens about the possibility of a “successful transition”. Health officials urged people to take booster shots, wear masks and be careful when traveling over the winter holidays, as the Omicron version prepared to take on the major strain.
European stock index futures fell over 2 per cent amid a global sell-off in equities amid tight pandemic-related restrictions on the global economy.
The Netherlands went into lockdown on Sunday and many European countries were likely to impose more COVID-19 restrictions ahead of the Christmas and New Year holidays.
Asian stock markets and oil prices also plunged on fears of a fresh global surge in coronavirus infections.
* SEBI stops futures trading to check inflation
The Securities and Exchange Board of India (SEBI) has ordered suspension of futures trading of key agricultural commodities for a year as the world’s largest importer of vegetable oils and a major producer of wheat and rice seeks to contain food inflation. is fighting for.
The halving is India’s most dramatic move since futures trading was allowed in 2003.
It jeopardized market confidence by making hedging difficult for traders, weeks after farmers ended a year of protests that led to the scrapping of controversial reforms.
Edible oil prices are nearing record highs and encouraged the Center to drastically cut taxes on imports of palm, soya and sunflower oils.
For the month of November, India’s wholesale price inflation (WPI) hit a record high of 14.23 per cent, while retail inflation stood at 4.91 per cent mainly due to hardening in prices of mineral oils, base metals, crude petroleum and natural gas. She came.
* Policy strict amid rising global inflation
Inflation has been a growing concern not only in India but globally throughout 2021.
Higher raw material costs and supply chain problems are increasing overall costs for businesses, which have raised prices on commodities to offset the effect.
Consumers have absorbed those price increases so far, but they continue to face pressure from rising prices and this could reduce spending.
The harsh stance of central banks across the world has also negatively impacted investor sentiment.
The momentum in global markets was broken when the US Federal Reserve last week changed its stance along with other global central banks.
As traders begin to close ahead of Christmas and the New Year, analysts said trading was thin and there was more potential for market volatility, but the mood has turned increasingly gloomy as central banks try to fight inflation. start reducing their huge financial support.
Last week, the Fed said it would accelerate a tapering of its bond-buying stimulus to end the program in March, while the Bank of England also stunned markets by becoming the first major global central bank to raise interest rates overnight. .
* Continuous sales by FIIs
Foreign institutional investors (FIIs) continued to sell shares in the capital market.
“The fall is also a result of continued selling by foreign institutional investors. There will be some sort of rollback of liquidity by central bankers,” Saurabh Jain, assistant vice president at SMC Securities, told Reuters news agency.
Overall, FIIs have pulled out more than Rs 17,500 crore from the markets in December so far.
*Foreign brokerages are not so fast about Indian markets
Foreign brokerages are downgrading India’s stock markets by being more expensive than other global stock markets such as China, Japan and others.
Whereas BSE Sensex While the broader NSE Nifty has risen nearly 28 per cent during the year, the broader NSE Nifty has gained 30 per cent.
The MSCI India index has gained nearly 30 per cent this year, which is almost double that of the global index.
However, investors have been cautious about a correction in the market as questions are being raised on how sustainable the market rally will be.
* US Fed’s decision on taper
US Federal Reserve officials discussed raising rates as early as March and slashing central bank balance sheets in mid-2022.
However, the comments barely changed the bond market’s outlook that short-term interest rates could be below the Fed’s projected peak.
“While some inflation concerns have eased since the Fed took action to contain it, economic activity is still likely to be impacted by COVID-19 restrictions. This could weigh on Treasury markets. Harshal Barot, a senior research advisor for South Asia at Metals Focus, told Reuters news agency.
With no new expenses now in the pipeline, some analysts said they would downgrade their growth outlook for the United States next year.
(with inputs from agencies)
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