Over the past several trading sessions, domestic stock markets have seen volatility as investors remain concerned about the overall impact of the omicron form of coronavirus.
Both the S&P BSE Sensex and the NSE Nifty 50 had two major falls last week following concerns that a new coronavirus variety was rapidly spreading across the country. As a result of scientists classifying the new variety as highly permeable, some governments have imposed new limits.
Market experts are concerned that hasty decisions by countries to contain the spread of the new COVID variant could ultimately hurt the global economic recovery and hurt markets. This in turn can have a detrimental effect on the Indian stock markets as well.
The new COVID variant Omicron has caused quite a stir in the world due to its mutation and spike protein capabilities. Although WHO has said that it is researching the latest version, the market has already started showing bearish trends as buyers started pulling their hands to avoid the market crash.
Nikhil Singh Sumal, Stock Market Analyst, said- “Market analysis can be quite complex in situations like these, foreign investors are withdrawing their money, and at the same time domestic investors are also starting to come in. So you cannot tell of the market. What will be the result. Because market trends can weigh either side. Market is highly overvalued at the moment, it needs correction but there is nothing to worry. If market goes through correction phase also Just invest 10% more of your investment and play it safe.And increase your capital by at least 50% if the market crashes.
Speaking about Omicron and the latest movement of market trends, Nikhil said- “Although you can see a bull run trend where the market is moving up, but be cautious as both crude oil prices and Omicron market are negatively impacted. And Nifty can fall even up to 16500 points. Expect a correction between 8-15%.
Global markets declined on the discovery of the Omicron variant, and Asian markets followed the trend.
Although the Indian markets are performing well, the recent addition of Omicron cases from Karnataka could have a negative impact. Many investors find themselves in a dilemma as the efficacy of the vaccine against this variant is yet to be studied and could take anywhere between 1-2 weeks.
This can also lead to a stagnation in economic normalcy. The sectors which are expected to perform well in these unprecedented times are IT, Pharma, Telecom and FMCG. At the end of the conversation, Nikhil said that short-term investors should look for profit booking, while long-term investors should focus more on the correction rate.
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