New covid variant drags Nifty down by 697 points, Sensex at 58,096

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Domestic benchmark equity indices opened with a gap down on Friday tracking Asain peers that fell amid caution over a new coronavirus strain and growing predictions of faster Federal Reserve policy tightening to curb inflation. In opening trades, Sensex nosedived 698 points or 1.19% to 58,096 while Nifty was quoting at 17,338 plummeting 197 points or 1.13%.

“The new headwind is the latest variant of the virus detected in South Africa, Botswana and Hong Kong. This along with sustained selling by FIIs for the seventh consecutive day are major sentiment negatives for the market. However, an important point to note from the market perspective is that the recent surge in Covid cases in Europe has not impacted the markets there. Since valuations continue to be high, investors have to be cautious,” VK Vijayakumar, Cheif investment Strategist at Geojit Financial Services.

Gainers & losers

Sectoral indices

All sectoral indices opened in the red on the NSE. Nifty Media index plunged 2.29% while Nifty Realty, Nifty Metal, Nifty Bank, Nifty Auto indices tanked over a per cent in early trades. Whereas Nifty FMCG, Nifty IT and Nifty Pharma indices lost up to 0.90%.

Broader markets

The pain in broader markets was much less compared to benchmark indices as the BSE MidCap index declined 105 points or 0.76% to 25,408 while the BSE SmallCap index was trading at 28,696 slipping 126 points or 0.44%.

Bears tightened their grips on the market as 1,609 stocks declined while 907 advanced and 74 remained unchanged.

Global markets

Overseas, Asian stocks are trading lower on Friday, as a new virus variant added to swirling concerns about future growth and higher US interest rates.

The World Health Organization officials said Thursday they are monitoring a new variant with “a large number of mutations.” A special meeting is scheduled for Friday to discuss its implications for vaccines and treatments. The variant, called B.1.1.529, has been detected in South Africa in small numbers, according to the WHO.

Markets in the U.S. were closed on Thursday for the Thanksgiving holiday.