Indian equity benchmarks suffered
sharp losses on Friday tracking a sell-off across global markets. Barring
pharmaceutical and healthcare stocks, all sectors slid deep into negative
territory. Benchmark indices started gap-down on Dalal Street, as traders were
concerned as WHO flags new Covid-19 strain. World Health Organization officials
met on Thursday to discuss a new coronavirus variant circulating in South
Africa and Botswana. The new variant, called B.1.1529, carries an unusually
large number of mutations, Francois Balloux, director of the UCL Genetics
Institute. Also, foreign fund outflow dented sentiments in the markets. Foreign
portfolio investors (FPIs) remained net sellers for Rs 2300.65 crore in the
Indian markets, provisional data showed on the NSE. Market participants
remained cautious as a report by ICRA said that the Reserve Bank of India's
revision of bad loan recognition and upgradation norms could bring a sharp
spike in the non-performing assets of non-banking finance companies (NBFCs) in
the country. Indices continued to languish at lower levels with deep cuts in
second half of the session, as some concern came with the CBDT said that the
Income Tax Department has detected huge unaccounted income after it raided some
Indian companies and their associates, being controlled by a neighbouring
country, in Delhi, Maharashtra and Gujarat. Traders overlooked Moody's
Investors Service stating that India's rising vaccination rate, stabilizing
consumer confidence, low interest rates and higher public spending underpin
positive credit fundamentals for the corporate sector. It also expects India's
economic growth would rebound strongly with GDP expanding 9.3 per cent in the
current fiscal ending March 2022 and 7.9 per cent in 2023. Traders also paid no
heed towards Niti Aayog Vice-Chairman Rajiv Kumar's statement that the
government is committed to improving the ease of doing business in the
country. He stated it is now one of the
commitments of this government to try and resolve and improve the ease of doing
business on the ground. Finally, the BSE Sensex fell 1687.94 points or 2.87% to
57,107.15 and the CNX Nifty was down by 509.80 points or 2.91% to 17,026.45.
The US markets closed lower on
Friday for the holiday-interrupted week, the major averages fell to their
lowest closing levels in at least a month, following reports a new and possibly
vaccine-resistant coronavirus variant has been detected in South Africa. The
news, which comes amid a surge in new Covid-19 cases in Europe, raised concerns
the pandemic could continue to wreak havoc on the global economy. The U.K. has
issued a temporary ban on flights from six African countries in reaction to the
new variant, which has also been detected in Belgium, Israel and Hong Kong. The
World Health Organization will hold a special meeting to discuss if the heavily
mutated strain will become a variant of interest or a variant of concern. Light
volume may have exacerbated the steep drop on Wall Street, as some traders
remained away from their desks ahead of an early close by the markets. A lack
of major U.S. economic data may also have kept traders on the sidelines ahead
of next week's closely watched monthly jobs report. Airline stocks moved
sharply lower amid concerns about new travel restrictions, resulting in a 6.5
percent nosedive by the NYSE Arca Airline Index. The index plummeted to its
lowest closing level in over ten months. Substantial weakness was also visible
among energy stocks. Reflecting the sell-off by energy stocks, the Philadelphia
Oil Service Index sank by 5.7 percent, the NYSE Arca Oil Index slumped by 4.3
percent and the NYSE Arca Natural Gas Index dove by 3 percent. Banking stocks
are also significant weakness amid a steep drop by treasury yields. Brokerage,
steel and semiconductor stocks also saw considerable weakness, moving lower
along with most of the other major sectors.
Crude oil futures ended sharply
lower on Friday, with the U.S. benchmark closing below the $70-a-barrel
threshold after the discovery in South Africa of a new variant of the
coronavirus that causes COVID-19. Traders' dumped oil after the U.S.
Thanksgiving holiday on Thursday, trading on fears potential lockdowns and
other restrictions on business and consumer activity could hit fuel demand as a
result of the new coronavirus variant. Meanwhile, the OPEC and its allies are
scheduled to meet on December 2 to discuss production policy for 2022. Trading
in U.S. oil futures closed an hour early at 1:30 p.m. Eastern. Benchmark crude
oil futures for January delivery fell $10.24 or 13.1 percent to settle at
$68.15 a barrel on the New York Mercantile Exchange. Brent crude for January
delivery lost $9.50 or 11.6 percent to settle at $72.72 a barrel on London's
Intercontinental Exchange.
Indian rupee tumbled against
dollar on Friday, on account of sustained dollar demand from importers and
banks amid heavy selling in domestic equities amid fears of a new Covid
variant. Scientists warned that it could be more infectious than Delta and even
be more resistant to vaccines, dealing a blow to the global recovery. New variant
(B.1.1529) has been detected in South Africa and scientists said that it could
be of real concern. Market participants also remained cautious as a report by
ICRA said that the Reserve Bank of India's revision of bad loan recognition and
upgradation norms could bring a sharp spike in the non-performing assets of
non-banking finance companies (NBFCs) in the country. On the global front,
Sterling briefly dropped below $1.33 for the first time since December 2020 as
the British currency found itself caught up in the dumping of riskier assets
amid panic over a new COVID-19 variant described as the most concerning yet. Finally,
the rupee ended 74.89, weaker by 37 paise from its previous close of 74.52 on
Thursday.
The FIIs as per Friday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 11993.31 crore against gross selling of Rs 12165.40 crore,
while in the debt segment, the gross purchase was of Rs 492.34 crore with gross
sales of Rs 767.56 crore. Besides, in the hybrid segment, the gross buying was
of Rs 42.12 crore against gross selling of Rs 36.18 crore.
The US markets closed lower on
Friday after a new coronavirus variant from South Africa appeared to take over
the globe. Asian markets are trading mostly lower on Monday as investors
tracked the developments surrounding the new coronavirus variant called
Omicron. Indian markets suffered the biggest single day losses since
early-April 2021 on Friday as a new variant of COVID-19 spooked global
financial markets. Today, the start of new week is likely to be
flat-to-positive. Some support will come with a private report that India's
economic recovery likely strengthened in the previous quarter, boosted by
services activity that recovered after pandemic-related mobility restrictions
were eased. Traders may take note of Commerce and Industry Minister Piyush
Goyal's statement that bilateral trade between India and Canada stands at $10
billion currently and there is tremendous potential to take it to much higher
levels. Besides, the Reserve Bank said India's forex exchange reserves
increased by $289 million to $640.401 billion for the week ended November 19.
However, weakness in global markets may cap the gains. There may be some
cuatiouness as AIIMS chief Dr Randeep Guelria said the new Omicron variant of
coronavirus has reportedly got over 30 mutations in the spike protein region
giving it the potential to reduce the efficacy of vaccines. Meanwhile, Industry
body PHDCCI has urged the GST Council to rationalise rates, stating that the
current rates are not in sync with the demand creation and employment
generation in the country. There will be some buzz in the banking stocks as RBI
a released the rules for ownership and corporate structure of private banks in
India. Infrastructure industry stocks will be in focus with the government data
showing that as many as 438 infrastructure projects, each worth Rs 150 crore or
more, have been hit by cost overruns totalling more than Rs 4.34 lakh crore.
There will be some reaction in gem, jewellery sector stocks as Commerce and
Industry Minister Piyush Goyal asked the gem and jewellery industry to focus on
areas like design, diversification of export product basket and lab grown
diamonds with a view to boost outbound shipments and job creation. IPO of Star
Health and Allied Insurance Company and Tega Industries will open for
subscription this week. Star Health's IPO will open on November 30 as the
company, backed by big bull Rakesh Jhunjhunwala seeks to raise up to Rs 7,249
crore from the public issue. On the other hand, Tega Industries' IPO is purely
an offer of sale of 1,36,69,478 equity shares by promoters and an existing
shareholder. The IPO will see the selling shareholders raise close to Rs 619
crore.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,026.45
|
16,889.64
|
17,259.34
|
BSE Sensex
|
57,107.15
|
56,649.09
|
57,909.99
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
517.87
|
459.40
|
449.35
|
478.10
|
ITC
|
270.27
|
223.60
|
221.11
|
228.06
|
State
Bank of India
|
263.05
|
470.00
|
462.10
|
482.90
|
Oil
& Natural Gas Corporation
|
231.35
|
147.75
|
145.25
|
151.25
|
ICICI
Bank
|
189.87
|
720.45
|
712.01
|
735.46
|
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