What Happened With Market Today

Equity benchmarks tumbled in today’s trade to log the second-worst day in eight months, as concerns over omicron variant, rating downgrade by Morgan Stanley, and RBI’s plan to drain liquidity sapped sentiment. Sensex plunged nearly 1200 points as concerns over the impact of surging Omicron cases across the world spooked investors, triggering an intense selloff in global equities.

Sensex slumped 1,190 points or 3 percent to end at 55,822. Similarly, the Nifty tanked 371 points or 2.2 percent to close at 16,614 while touching an intra-day low of 16410. There was broad-based selling in the market. Auto, Banking, Metal, Realty, Cement, mid and small-cap stocks recorded sharp declines. Tata Steel was the top loser in the Nifty pack, sinking over 5 percent followed by SBI, IndusInd Bank, Bajaj Finance, HDFC Bank, ONGC, Coal India, and NTPC. Pharma major, Cipla is the only major gainer in the Nifty stocks. Nifty 500 stocks advance–decline ratio was 1:15 and India VIX spiked 15% to close at 18.96.

Equity Index fell 10% from the recent peak as concern about risks from the rapid spread of the omicron coronavirus variant prompted selling of equities ahead of year-end holidays and weak global markets. As the selloff in the market intensified on weak global cues, tightening monetary policy, USDINR spiking to a 20-month high to above 76 and continued FIIs selling (FIIs over Rs26bnor $4bn during the month of December). Investors turned cautious amid central banks taking a hawkish stance and a surprise rate hike by the Bank of England on Thursday. Both Asian and European markets declined 2-3% on fears about a fresh global surge in coronavirus infections and as the future of US President Joe Biden’s massive social spending bill was thrown into doubt after it lost the crucial vote of a moderate Democrat.

Among the major Indices, the Nifty realty Index was the biggest loser today, falling by 5%. Nifty metal, mid-cap, small-cap Index declined 4% each. Nifty Bank and IT Index fell 3% and 3% respectively. However, the Nifty pharma index declined marginally.

Among Nifty Realty stocks, Lodha slipped 9% to close at Rs.1075. DLF, IB Real, Brigade, Oberoi Realty, Godrej Properties, and Prestige declined between 4-7%. Metal stocks like Jindal Steel, Tata Steel, Hindalco, Nalco, SAIL, and Vedanta shed 3-5%. Auto stocks like Tata Motor declined 5% to close at Rs.447. However, Maruti managed to end a flat note, recovering nearly 4% from the intra-day low of Rs.7035.

Banking stocks Au Bank nosedived by 10% to close at Rs999. Bandhan Bank declined 8% to close at Rs247. Axis Bank, RBL Bank, ICICI Bank, Kotak Bank, Indusind Bank, and HDFC Bank declined 2-5%. Pharma stocks like Cipla gained 4% to close at Rs.894. Alembic Pharma, Glenmark, Dr Reddy, and Lupin Labs bounced back into positive territory.

Technical Outlook:

The Nifty index opened the gap down and witnessed sustained selling pressure right from the initial tick. Sharp selling drooled the index down to 16410 levels as weakness swept across the street. However, the second half of the session saw a recovery of around 200 points and it closed with losses of 370 points near to 16600 levels. It formed a Bearish candle on a daily scale and has been forming lower lows from the last six sessions. Now till it remains below 16800 zones, a bounce could be sold and weakness could be seen towards 16400 then 16200 zones whereas a major hurdle exists at 17000 zones.

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