Benchmark equity indices plunged as Sensex lost 1,189.73 points on Monday to close at 55,822.01. The broader 50-share NSE Nifty also lost more than 2.1% during the day’s trading to finish at 16,614.20.
Analysts said that the rise in global coronavirus cases due to spread of the Omicron variant and the surge in India’s inflation numbers has hampered investor sentiments.
All sectoral sub-indices closed with losses on Monday. The Nifty PSU Bank (4.48%) and Nifty Metal (3.78%) indices slumped the most.
Stocks of major companies like Tata Steel, State Bank of India, HDFC Bank, ITC and Reliance were among the top losers in Monday’s trading, with their scrips slipping in the range of 2%-5%.
Chief Investment Strategist at Geojit Financial Services VK Vijayakumar told PTI that the rise in inflation, surge in Covid-19 cases and consistent selling by foreign institutional investors affected the markets.
“These negative factors persist, causing concerns about further downtrend in the market, particularly if FIIs continue to sell,” Vijayakumar said. “But negative sentiments are unlikely to last long. Omicron variant, though fast spreading, has not proved to be highly virulent as feared. Also, FIIs [foreign institutional investors] will turn buyers soon when valuations become attractive.”
The spread of the Omicron variant has led to renewed restrictions in several European countries. In India too, daily cases have started to rise in some parts of the country. Meanwhile, India’s wholesale inflation rose to 14.23% in November – the highest in 12 years.