A 1,688-point crash in Sensex wipes off Rs 7.36 lakh cr from market

NEW DELHI: The biggest market crash in seven months erased Rs 7.36 lakh crore of investor wealth on Friday as traders sold whatever they could as many countries detected a new mutation of the coronavirus. Benchmark indices broke many support levels placed on technical charts.

Nervousness on the new coronavirus variant and expectations of the US increasing the pace of tapering has led to recent market weakness, said analysts. India VIX, a measure that shows fear in the market, spiked 25 per cent to nearly 21-level.

The 30-share pack Sensex declined 1,687.94 points or 2.87 per cent to close at 57,107.15. Its broader peer NSE Nifty plunged 509.80 points or 2.91 per cent to 17,026.45.


“This trend may take some time to recover as the WHO meeting on the new mutant variant impact and hospitalization rates in US and Europe will be watched by the market very closely. The recent commodity prices correction can lower the raw material cost for certain sectors like consumer and help them to recover after a period of consolidation,” said Amit Gupta, Fund Manager – PMS, ICICI Securities.

Market at a glance:

• Pharma names rally as rising Covid concerns brightens their outlook
• Metal stocks plunge following the international trend as futures tank
• It’s deja vu for travel and leisure sector stocks as they take a plunge
• Tarsons Products hits 20 per cent upper circuit after listing
• Tata Power slumps 7 per cent after JP Morgan downgrade

FACTORS DRIVING MARKETS
New Covid variant: Hours after South African authorities announced they had detected a new variant of the novel coronavirus with a “very unusual constellation” of mutations, the Centre directed states to rigorously screen and test travellers coming from or transiting through three countries in which the variant had been confirmed — South Africa, Botswana, and Hong Kong.

More lockdowns: European countries expanded COVID-19 booster vaccinations and tightened curbs overnight. Slovakia announced a two-week lockdown, the Czech government will shut bars early and Germany crossed the threshold of 100,000 COVID-19-related deaths.

FII selling: Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 2,300.65 crore, data available with NSE suggested. This is much more than what DIIs have been buying. The selling has also dampened the spirit of investors.

Yields fall: Moves in Treasuries were also sharp following the Thanksgiving holiday and yields quickly pulled back some of the week's gains. Benchmark 10-year yields fell nearly 6 basis points to 1.5841 per cent.


Among the bluechip names, Cipla was the top gainer, rising 7.23 per cent. Dr Reddy’s Labs, Divi’s Labs and Nestle India were other gainers.

JSW Steel was the top loser in the Nifty pack, falling 7.48 per cent. Tata Motors, Hindalco Industries, Adani Ports, IndusInd Bank, BPCL, Maruti Suzuki and Tata Steel were others that ended in the red.

Broader market indices ended lower, in line with their headline peers. Nifty Smallcap dropped 2.89 per cent and Nifty Midcap plunged 3.25 per cent. Nifty 500, the broadest index on NSE, ended down 2.93 per cent.

Indiabulls Housing Finance, PNB Housing Finance, Trident, Alkem Laboratories, Dr Lal Pathlabs and Pfizer were top gainers from mid and smallcap indices, climbing in the range of 4-7per cent.

Traders should continue with the bearish bias and use the bounce to create shorts. Investors, on the other hand, should see this as an opportunity and start accumulating quality stocks in a staggered manner.

-Ajit Mishra, Religare Broking

National Aluminium Company, Shriram Transport Finance, Delta Corps, RBL Bank, Chambal Fertilisers and SpiceJet were major losers from broader market space, falling in the range of 7-10 per cent.

Barring Nifty Pharma, which gained 1.7 per cent, all sectoral indices traded with cuts. Nifty Realty was the biggest loser, down 6.26 per cent. Nifty Metal, Nifty PSU Bank and Nifty Auto were other major losers.

Market breadth was in favour of losers as 1,067 stocks ended in the green, while 2,244 names settled with cuts. As many as 237 securities hit 52-week highs, mostly from the smallcap space. Meanwhile, 34 names hit 52-week lows, mostly from the microcap space. About 395 stocks hit upper circuit limits and 180 lower circuit limits.

European markets were trading lower. London-based FTSE was down 2.66 per cent while Paris and Frankfurt declined 3.18 per cent and 2.55 per cent, respectively. In Asia, all markets closed in the red.