MONEY

Sensex, Nifty crash by 945 & 284 points respectively as falling rupee, FII selloff spook investors

Equity indices spiralled lower on Monday as the spread of Omicron variant in the country spooked investors and triggered an across-the-board selloff. 


A plunging rupee and continued selling by foreign institutional investors (FIIs) added to the woes, traders said. 


Extending its losing streak for the second straight session, the 30-share BSE Sensex crashed by 949.32 points or 1.65 per cent to close at 56,747.14, an over three-month low.


On similar lines, the broader NSE Nifty slumped by 284.45 points or 1.65 per cent to 16,912.25. 


All Sensex components ended in the red. IndusInd Bank was the biggest laggard, shedding 3.75 per cent, followed by Bajaj Finserv, Bharti Airtel, HCL Tech, TCS, Tech Mahindra and Infosys. 


Equity investors lost Rs 4.29 lakh crore in Monday’s session, with the market capitalisation of all BSE-listed companies standing at Rs 2,56,72,771.67 crore. 


All sectoral indices ended in the red, with BSE IT, tech, telecom, energy, healthcare and auto tumbling by up to 2.49 per cent. 


Broader BSE midcap and smallcap indices fell by 1.35 per cent each. 


India reported 17 more cases of the Omicron variant of the Coronavirus on Sunday – nine persons in Rajasthan capital Jaipur, seven in Maharashtra’s Pune district and a fully-vaccinated man who arrived in Delhi from Tanzania – taking the tally to 21 in the country.


With this, four States and the national capital have now reported cases of the potentially more contagious variant which has sparked a fresh alert across the world. 


“Ambiguity surrounding Omicron continued to dent the morale of domestic investors ahead of the important RBI policy announcement on Wednesday. The domestic market is expected to be volatile as the near term will be dominated by developments on new variant and RBI and Fed policy decisions,” said Vinod Nair, the head of research of Geojit Financial Services. He further added: “Market expects RBI to hold on to the accommodative policy, considering short-term uncertainties. However, a change is expected during H1 2022, which Indian market is factoring while global equities are trading mixed.”  


The RBI’s rate-setting panel began its three-day deliberations on Monday to decide the next monetary policy amid expectations that the central bank would maintain status quo on the benchmark interest rate in the backdrop of the Omicron threat. 


Global markets were mixed as investors tracked the spread of Omicron in multiple countries. In China, the central bank cut banks’ reserve requirements to shore up liquidity, even as embattled property major Evergrande said that it might run out of money  to “perform its financial obligations”.  


In Asia, bourses in Shanghai, Hong Kong and Tokyo ended with losses, while Seoul was positive.


Equities in Europe were trading on a positive note in mid-session deals. 


Meanwhile, international oil benchmark Brent crude spurted by 2.23 per cent to $71.44 per barrel.  


The rupee on Monday plunged by 28 paise to settle at 75.40 against the US dollar.

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