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Weekly market wrap: Sensex crashes over 2,500 points as new COVID-19 variant, FPI selling weigh sentiment

Weekly market wrap: Sensex crashes over 2,500 points as new COVID-19 variant, FPI selling weigh sentiment

Sensex declined 2,528 points to 57,107 on November 26 from 59,636 on November 18. Likewise, the Nifty index tumbled 738 points to 17,026 during the week gone by.

Weekly market wrap: Sensex crashes over 2,500 points as new COVID-19 variant, FPI selling weigh sentiment (Photo: Reuters) Weekly market wrap: Sensex crashes over 2,500 points as new COVID-19 variant, FPI selling weigh sentiment (Photo: Reuters)

Benchmark equity indices BSE Sensex and NSE Nifty tanked over 4 per cent this week as renewed COVID-19 fears over a new variant found in South Africa spooked sentiment. The 30-share Sensex declined 2,528 points to 57,107 on November 26 from 59,636 on November 18. Likewise, the 50-share Nifty index tumbled 738 points to 17,026 during the week gone by.

 

As many as 44 stocks in the Nifty index settled the week in the red. Shares of auto major Maruti Suzuki India tanked the most at 11.66 per cent. It was followed by IndusInd Bank (down 10.58 per cent), Tata Motors (down 9.71 per cent), Bajaj Finance (down 9.06 per cent) and Tata Consumer Products (down 7.85 per cent). Mahindra & Mahindra, Titan Company, BPCL, Bajaj Finserv, State Bank of India, Eicher Motors, Indian Oil Corporation, Axis Bank and HDFC also lost over 5 per cent.

 

On the other hand, Cipla, Power Grid, Bharti Airtel, Divi’s Labs, DR Reddy’s Labs and Coal India gained between 1.50 per cent and 8.50 per cent. Commenting on the factors that dampened market sentiment, Vinod Nair, head of research, Geojit Financial Services said, “Markets succumbed to panic selling amid rising fears of the new COVID-19 variant in South Africa. Concerns over rising inflation were also visible in the minutes of the recent FOMC meeting, signalling higher chances of an aggressive policy tightening.”

 

Meanwhile, foreign institutional investors continued their selling spree, as fear of overvaluation and a possible rate hike haunted the foreign investors. Overseas investors have sold shares worth over Rs 16,000 crore during the past five trading sessions. Market watchers also added that falling of Reliance-Aramco deal and the subdued listing of Paytm also soured the market mood. Shares of index heavy RIL declined 2.45 per cent to Rs 2,412 for the week ended November 26.

 

Yesha Shah, Head of Equity Research, Samco Securities said, “Selling by FPIs in the week signifying valuation concerns. The focus seems to be shifting from premium Indian equities to relatively cheaper markets. In addition to this, the cautiousness was heightened by the unenthusiastic response towards India’s largest IPO to date and a resurgence of Covid concerns across Europe.”

 

Among the sectoral indices on the BSE, the Auto index tumbled the most at 8.11 per cent. It was followed by Realty (down 6.87 per cent), Bankex (down 5.09 per cent), Capital Goods (down 5.02 per cent) and Oil & Gas (down 3.75 per cent). However, the BSE Telecom and Healthcare indices gained 2.97 per cent and 1.75 per cent, respectively.

 

“Oil and gas indices remained under pressure amid reports of the US releasing its emergency oil reserves to keep the rising crude oil prices under control. The telecom sector was also in focus as the sector majors initiated rate hikes which will enhance profitability," Nair said.

 

Telecom giant Bharti Airtel on November 22 announced the list of revised mobile tariffs, which came into effect from November 26. Revising tariffs is the first step to ensure that the mobile Average Revenue per Unit (ARPU) remains between Rs 200-300 to ensure a financially healthy business model. The Rs 79 plan, for instance, will cost Rs 99 from November 26.

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