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Home / Markets / Stock Markets /  Sensex slumps over 2,000 points, midcaps crack: 10 updates

Tracking weak global markets, Indian equities saw a sharp selloff today with Sensex falling as much as 2,037 points at day's low, before settling over ,400 points lower at 45,553. The Nifty hit 13,131 at day's low before paring some losses. The BSE midcap and smallcap indices were down about 4%. European shares fell sharply today while Dow futures were lower as investors sought the safe haven of US dollar amid growing unease over the economic impact of a new coronavirus strain in Britain.

The Indian government has also decided that all flights originating from the UK to India shall be temporarily suspended till 31st December.

Here are 10 updates:

1) All the Sensex stocks were in the red. L&T, NTPC, SBI, M&M, IndusInd Bank and ONGC were down between 5% and 8%.

2) The dollar index rebounded 0.50% to 90.40 global market volatility. The rupee fell to 73.70 against the US dollar.

3) India's equity benchmarks Sensex and Nifty have surged more than 80% from lows hit in March, powered by record inflows from foreign institutional investors (FIIs), progress on COVID-19 vaccines globally and signs of a domestic economic recovery.

4) The sharp rally had made some analysts cautious. "Today’s market selloff is more due to technical price correction in nature than the fundamental as we believe. After a significant rally without interruption, the market was extended as it failed to show resilience to stay above the Nifty 50 Index level of 13750. We have observed the market to attempt multiple times over the last week to get past the supply zone. Failure to do so causes the bulls to distribute and profit booking. Our research suggests that technical factors are shifted today to support a further correction in the future. Any corrective wave down should find support around 12990-12960. As such, we advise the traders to refrain from building a new buying position until we witness a correction," said Ashis Biswas Head of Technical Research at CapitalVia Global Research Limited-Investment Advisor.

5) In India, the volatility index, India VIX, shot up 23% to 22.92, indicating the nervousness among investors.

6) "A new and faster-transmitting strain of the coronavirus in the UK is an area of concern. This has led to further restrictions on travel and economic activity. Acceleration in the number of cases in the US and poor economic data are other dampeners. However, the US Congress agreement on $900 billion of fiscal stimulus is likely to support markets. High valuation continues to be a concern in India. Investors should exercise caution," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

7) The news of the new coronavirus strain in the UK, said to be up to 70% more transmissible than the original, has put some 16 million Britons under tougher lockdowns.

8) Adding to the jitteriness of investors, the lack of a post-Brexit trade deal ahead of the December 31 deadline also made them nervous.

9) France became the latest European country to close all its borders with the UK after Germany, Italy, Belgium, Denmark, Bulgaria, the Irish Republic, Turkey and Canada suspended flights amid growing concerns of an "out of control" new variant of coronavirus spreading at a much faster pace in parts of England.

10) “The apprehension is coming from the prolonged lockdown in the U.K and the concerns related to the new variant of the virus," said Sanjay Sinha, strategist at Citrus Advisors, adding that foreign institutional investor flows will likely not sustain going into the holiday season. (With Agency Inputs)



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