Sensex crashes as Covid variant fuels global rout

Mumbai: The Sensex nosedived 1,688 points while the Nifty slumped below the 17,100-level on Friday as a new and potentially vaccine-resistant coronavirus variant sent shockwaves through global markets.

The variant, detected in South Africa, Botswana and Hong Kong so far, has an unusual combination of mutations, as per initial reports. Countries like Britain and Japan have already imposed travel restrictions, raising the spectre of a fresh wave of lockdowns.

The 30-share BSE Sensex plummeted 1,687.94 points or 2.87 per cent to close at 57,107.15 following an across-the-board selloff. Similarly, the NSE Nifty plunged 509.80 points or 2.91 per cent to 17,026.45.

IndusInd Bank was the top loser in the Sensex pack, tanking 6.01 per cent, followed by Maruti, Tata Steel, NTPC, Bajaj Finance, HDFC and Titan. Only four counters managed to close in the green -- Dr Reddy’s, Nestle India, Asian Paints and TCS, spurting up to 3.32 per cent.

Investors lost a whopping Rs 7.35 lakh crore in Friday’s session, with the market valuation of all BSElisted companies standing at Rs 2,58,31,172.25 crore.

“Triggered by the new Covid variant in South Africa, domestic markets plummeted into negative territory following weak global peers. Existing inflation fears coupled with worries of an aggressive policy tightening by the US Fed Reserve also added to today’s catastrophic session. On the domestic front, broad-based sell off was witnessed as investors dumped COVID-sensitive stocks while focus was shifted towards the pharma sector amid growing concerns over the new variant with higher mutations,” said Vinod Nair, Head of Research at Geojit Financial Services.

During the week, the Sensex plunged 2,528.86 points or 4.24 per cent and the Nifty shed 738.35 points or 4.15 per cent.

“Markets saw sharp correction this week amid renewed concerns pertaining to COVID....The new variant of Covid is presenting challenges in the form of lockdowns and travel bans,” said Shrikant Chouhan, Head of Equity Research, Kotak Securities.

Rupee also takes a hit

Mumbai: The rupee on Friday plunged by 37 paise or 0.50 per cent against the US dollar to close at a nearly month’s low as investors turned cautious in view of massive selloffs in domestic equities and worries over a new variant of Covid-19. The rupee erased all of its gains in the month while suffering its worst weekly loss of 59 paise since October 8 due to month-end dollar demand and in anticipation that the US Fed will accelerate asset tapering and hike interest rates around mid-2022, analysts said. The local currency opened at 74.60 against the previous close of 74.52 and witnessed an intra-day high of 74.58 and a low of 74.92 against the US dollar in day trade. The rupee settled at 74.89 a dollar, the lowest closing level since October 28. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.34 per cent at 96.44 but capped its losses on worries about a newly discovered strain of coronavirus that causes Covid-19. “Rupee erased all the gains of the month following risk-off moods after worries over a new variant of COVID-19 surges. Month-end dollar demand and unwinding of carry trade in global forex markets also weighed on rupee,” Dilip Parmar, Research Analyst, HDFC Securities. The rupee registered its biggest weekly fall after October 8, Parmar said. “After a sharp appreciation of around 1.4 per cent witnessed during the month, the Indian rupee has given up all of the gains and is treading into the negative trajectory as the month draws to a close,” Sugandha Sachdeva, Vice President, Religare Broking Ltd.