Sensex snaps rally, tanks over 700 Pts: 5 factors that pulled markets down

#Market Edge, #Nifty, #Sensex

The market corrected sharply after a stellar 2.5-percent gain in the last two sessions. The benchmark indices fell over 1 percent each on December 3.

The BSE Sensex dropped 765 points, or 1.3 percent, to 57,696, and the Nifty50 shed 205 points, or 1.2 percent, to 17,197.

Let’s take a look at the five factors that drove the markets down:

1. Omicron

The health ministry has confirmed that two people in Karnataka have been tested positive for the new COVID variant Omicron. They have also said that people in contact with both the patients have been traced and are tested for the Omicron virus. India has become the 30th country in the world to detect the newest strain.

“Several reports suggest that the Omicron virus is more contagious than earlier detected COVID virus strains. As of now, it looks like the situation is under control for the Omicron virus in India but if it spreads, it will impact the market,” said Yash Gupta, Equity Research Analyst at Angel One.

India reported 9,216 crore fresh COVID cases in the last 24 hours, said a home ministry update at 8am on Friday. The increase in vaccination across the country seems to be helping control the spread of the virus.

2. Market Movers and Sectoral Performance

Index heavyweight Reliance Industries was the second biggest loser in the BSE Sensex, falling 3 percent. ITC, HDFC and HDFC Bank were also under pressure, declining 0.8-1.66 percent.

About 26 stocks corrected in the BSE Sensex against 4 rising stocks.

All major sectors are also in a bear trap with the Financial services and FMCG being the prominent losers with 1 percent drop in each. Profit-booking could be one of the major reasons for Friday’s correction.

Nifty Auto, Bank, IT and Pharma indices were also down 0.8 percent each.

3. Star Health IPO Disappoints

The failure of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company to get full subscription could also be one of reasons for weak sentiment in the market.

The Rs 7,249-crore public issue was subscribed only 79 percent, even as the company extended timing by a couple of hours on December 2. The reserved portion of retail investors and qualified institutional buyers was fully subscribed but non-institutional investors and employees’ book remained undersubscribed.

4. Caution Ahead of RBI Policy

Investors seem to be cautious ahead of the Monetary Policy Committee meeting next week. Experts largely feel there could be a reduction in the gap between reverse repo and repo rate, though the RBI could continue with accommodative stance, while keeping a close watch on new COVID variant.

“As the cobwebs being to clear w.r.t. policy making front, central bankers across the world are grappling with the debut of the Omicron variant of COVID virus. The path to normalisation has begun across the world, including India, and is less likely to stop for now,” said Lakshmi Iyer, CIO for Debt and Head of Products, at Kotak Mahindra Asset Management Company.

“We expect a reasonably high chance of 15/20bps hike in reverse repo rate – a start to reduce the gap between repo and reverse repo rates,” she said. “The policy stance may remain status quo and hinge on incremental developments in the near term. We expect VRRR (variable reverse repo rate) as a tool to normalise liquidity to continue to gain momentum.”

5. Technical View

The Nifty50 saw formation of a sizeable bearish candle on the daily charts after a bullish candle formation in the previous session, indicating that the market is expected to be rangebound and volatile.

“The market witnessed some correction after a failed attempt to sustain the Nifty50 Index level of 17,400. Research suggests that sustaining above 17,200 will be an important level for the market to stay positive in the short term,” said Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research.

“If the market is able to sustain the level of 17,200, it can witness a positive momentum leading to the higher levels near 17,600. The momentum indicators like RSI and MACD are showing positive momentum in the market,” he added.

News Related

OTHER NEWS

Fortnum & Mason in talks about Qatar expansion as World Cup looms

The Queen’s favourite grocer is in talks with prospective franchise partners about establishing a presence in the tiny Gulf state ahead of the World Cup, Sky News understands. Read more »

UK's Bentley pouring billions into electric car overhaul

The Associated PressFILE – People stand at a Bentley Bentayga SUV car during the annual shareholders meeting of the Volkswagen AG in Hannover, Germany, Wednesday, May 10, 2017. Luxury automaker ... Read more »

Canary Wharf, travel and mental health in the office

Listen to “Canary Wharf, travel and mental health in the office”. Ian King speaks to Citi’s chief executive in Europe about the global bank’s refurbishment of its Canary Wharf headquarters. ... Read more »

EU judge cancels mega fine American chip maker Intel

Photo: ANP The American chip manufacturer Intel does not have to pay a fine of 1.06 billion euros from 2009 for abuse of power. The General Court, part of the ... Read more »

'Some airlines will win, some will lose'

Read more »

PTTEP seen taking over big Myanmar gas field as majors exit

PTT Exploration and Production is a partner in the Yadana gas field in the Andaman Sea off Myanmar. The gas is delivered to power plants in Thailand and to Myanmar’s ... Read more »

Coal Ministry CPSEs clock 28.33% growth in capex

Representative image. The government on Wednesday said the Ministry of Coal, through its CPSEs, has registered a 28.33 per cent year-on-year growth in capex achievement at Rs 12,605.75 crore for ... Read more »

Intel wins appeal against $1.2 billion EU antitrust fine

Intel on Wednesday won its appeal against a 1.06-billion-euro ($1.2 billion) EU antitrust fine handed down to the U.S. chipmaker twelve years ago for stifling a rival, in a major ... Read more »

IMF asks El Salvador to drop bitcoin, more countries clamp down

The International Monetary Fund (IMF) has urged El Salvador to drop bitcoin as a legal tender, citing risks to the nation’s financial stability and consumer protection, joining a growing chorus ... Read more »

US-China tech war: Shenzhen to establish international sourcing platform for semiconductors as global chip shortage persists

China will develop an international sourcing platform for semiconductors and other electronic components in Shenzhen – known as the country’s Silicon Valley and the richest city in southern Guangdong province ... Read more »

ECB member warns of economic impact of Ukraine conflict

Photo: ANP The head of Lithuania’s central bank warns of severe economic consequences for Europe if the conflict between Russia and the West over Ukraine escalates. Gediminas Šimkus, who also ... Read more »

Luxury car brand Bentley switches to fully electric

The German car group Volkswagen, the owner of Bentley, has stated that it will modernize the Bentley factory in Crewe, England, in the coming decade. The decision brings relief to ... Read more »

PMC Bank-Unity merger: What does the final scheme mean for depositors?

The RBI crackdown on co-operative banks continues in 2021 as well. [Representational Image] With the government approving the final amalgamation scheme of Punjab and Maharashtra Bank (PMC Bank) depositors, the 39-year-old lender will ... Read more »

Japan's Kirin says Myanmar unit blocked liquidation in Yangon court

FILE PHOTO: The Kirin logo is displayed at Kirin Brewery Co. Yokohama Factory in Yokohama, south of Tokyo, Japan, June 11, 2019. (Reuters) TOKYO: Japanese beverage maker Kirin Holdings' said ... Read more »

Vedanta demerger call by March-end: Anil Agarwal

File image of Vedanta’s Anil Agarwal (Image: PTI) Metals and mining group Vedanta Ltd will announce the contours of a proposal to spin off key businesses into separate listed companies ... Read more »

Bentley invests billions in UK electric car production

Photo: ANP British luxury vehicle manufacturer Bentley Motors will start producing its first all-electric car in the United Kingdom. The plan is part of a £2.5bn (£3bn) investment to switch ... Read more »

Pets at Home laps up COVID ownership boom

Read more »

Each dose of Covishield, Covaxin likely to be capped at Rs 275 after getting regular market approval

Image: Reuters The price of Covishield and Covaxin, the Covid vaccines which are expected to soon get regular market approval from India’s drug regulator, is likely to be capped at ... Read more »

Hong Kong retail banks are having their worst time in a decade as low interest rates crimp profits

Hong Kong’s retail banks are having their worst time in a decade, as the low interest rates amid the ongoing Covid-19 pandemic crimped profit margins across the industry for the ... Read more »

How Kia Carens Stacks Up Against Hyundai Alcazar. Here's A Comparison of Specs

Kia India recently unveiled the Carens (a portmanteau of ‘car’ and ‘renaissance’), its six- and seven-seater people-mover that the firm is calling a RV (recreational vehicle). The Carens is based on ... Read more »

US fund Knighthead offers £38m to keep Wolseley restaurant-owner trading

Knighthead has submitted an offer to Corbin & King's administrators to refinance £38m of loans owed by the restaurant group to Minor International, Sky News learns. Read more »

Wizz Air is optimistic about demand for flight tickets in summer

Photo: ANP Airline Wizz Air is “cautiously optimistic” about the demand for tickets next summer. The price fighter says that the number of bookings has risen sharply, for example, after ... Read more »

Nearly 80,000 healthcare employees sick at home: absenteeism at highest level in twenty years

In the fourth quarter of 2020, absenteeism was still 7.49%. A year later, it was 8.24%: 10% higher. Long-term absenteeism in particular has increased in the sector. This concerns hospitals, ... Read more »

Madhya Pradesh cops file FIR against sellers over tricolour-themed products on Amazon

Representative image Police on Tuesday evening registered an FIR in Bhopal against unidentified sellers on e-commerce giant Amazon after it emerged that some products, including shoes, featuring images of the ... Read more »

Budget 2022 | Bring natural gas under GST to realise PM Modi's vision of gas-based economy: Industry

The government should bring natural gas under the Goods and Services Tax (GST) regime to realise Prime Minister Narendra Modi’s vision for a gas-based economy and raising the share of ... Read more »

Citi backs City's future with major investment

Read more »

Gazprom Neft plans to increase hydrocarbon output to 130 mln tonnes by 2025

Oil demand will continue to recover in 2022, the company’s CEO Alexander Dyukov also noted Read more »

Tech, gambling and alcohol helped the NFL earn almost $2 billion in sponsorships this season

The National Football League is nearing $2 billion in partnership fees, the most in professional sports. Agreements from betting firms and technology companies helped the NFL lure a record $1.8 ... Read more »

US wants to make Europe less dependent on Russian gas

Photo: ANP The United States wants to make Europe less dependent on gas and oil from Russia because of the looming conflict over Ukraine. The administration of President Joe Biden ... Read more »

Lamborghini to bid farewell to pure combustion cars this year

Lamborghini is gearing up for the final lap of combustion engines powering coveted models like the Aventador as the sports-car maker switches its lineup to plug-in hybrids. The Volkswagen AG ... Read more »

Starbucks to introduce energy drink line

Photo by: Starbucks Press Release Starbucks is offering something new to its customers, and it is a line of energy drinks. The coffee chain has apparently entered the energy drink ... Read more »

Entrepreneurs have two weeks longer to apply for TVL

Photo: ANP Entrepreneurs are given two weeks longer to submit an application for an allowance for their fixed costs (TVL). The counter will now close at 5 p.m. on 21 ... Read more »

Climate Change: World must almost double investment to US$9.2 trillion a year to hit Paris Agreement goals, says McKinsey

The world will need to invest US$9.2 trillion a year in the infrastructure of the sectors most prone to carbon dioxide emissions in the coming three decades if the Paris ... Read more »

Covid claims lead to closure of Southeast Insurance

People wait for Covid-19 vaccination certificates at Simummuang market in Pathum Thani province on Wednesday. Rising claims for Covid-19 payouts by policyholders were cited as the reason for the closure ... Read more »

Budget 2022 should take a long-term view for the EV sector

EV charging | Representative image The automobile sector, particularly the Electric Vehicle (EV) segment, has emerged as the elephant in the room, and India is on the cusp of heralding ... Read more »

Govt mulls first tax on stock trading in 30 years to cut budget gap

(Bangkok Post file photo) The government is considering taxing stock trading for the first time in more than three decades, along with making crypto traders part with a share of ... Read more »

McDonald's adds Chicken Big Mac for the first time in UK menu

Photo by: McDonald’s Website McDonald's is finally adding the popular Chicken Big Mac to its menu list in the United Kingdom. Although the sandwich is already being served in other ... Read more »

How AI can help deliver on metaverse's promise of a better future

The metaverse refers to the convergence of physical, augmented and virtual reality in a shared online space. The result will be a merging of real and virtual worlds to create ... Read more »

Unilever axes 1,500 management jobs worldwide in a major organizational shake-up

Photo by: Unilever Press Release Unilever announces major changes in its organization, and it includes cutting 1,500 management jobs worldwide. The consumer goods company headquartered in London said on Tuesday, ... Read more »

Nearly 69 thousand new-build homes in 2021

the Hague Nearly 69 thousand new-build homes were completed in 2021. That is less than in 2019 and 2020, but more than in the years 2012-2018. As a result, the ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic