Indices snap two-day winning streak amid profit booking and Omicron scare


The benchmarks ended a volatile session on Wednesday lower, ending their two-day winning streak on a mix of profit booking and Omicron concerns. The benchmark Sensex index ended Wednesday’s session at 57,806.5 – a decline of 91 points, or 0.2%. The Nifty, on the other hand, ended the session at 17,213.6 – a decline of 19 points, or 0.1%.

The total number of Omicron cases in India rose to 781 on Wednesday. On Wednesday, the World Health Organization said Omicron poses a “very high” risk and could strain healthcare systems. The new variant has led to record outbreaks in many countries. The emergence of Omicron has rekindled concerns about the economic impact of the pandemic as governments around the world have imposed more restrictions to curb the spread.



Additionally, analysts said there was some profit on investors after another year of record gains. Besides Covid-19, a hawkish stance by central banks is another headwind investors are bracing for next year. A flurry of inflation data in the recent past has forced central banks around the world to prioritize tackling inflation after calling it “transitional” until last month.

“Markets took a break from the recent rally and ended slightly lower in a lackluster session. After the initial rise, the benchmark gradually declined and traded in a range thereafter. However, movements on the broader front of the market kept traders busy until the end,” said Ajit Mishra, VP of Research, Religare Broking.

Going forward, analysts said investors should be cautious due to Omicron and interest rate concerns. But at the same time, there is cause for celebration as the economy appears to be in recovery mode.

“The scheduled monthly expiration of December derivatives contracts will keep volatility elevated. The Banking Pack is still struggling and its performance will be critical for the next directional move. Covid cases will remain on participants’ radar. Keeping the scenario in mind, we suggest continuing with a stock-specific trading approach,” Mishra said.

Market breadth was positive, with 2,053 stocks up and 1,334 down. Six hundred and nineteen stocks reached the upper circuit and 413 reached their 52-week high. Eighteen Sensex shares fell. State Bank of India fell the most among Sensex voters and ended the session down 1.5%. The ITC decreased by 1.4%.

A dozen BSE sector indices fell. Metals stocks fell the most and its BSE sector index fell 1.01%.

Pharmaceutical stocks (pharma) were in demand on Wednesday. The Covid antiviral pill Molnupiravir won approval from India’s drug regulator on Tuesday and will be manufactured by 13 Indian drugmakers.

“Outweighing weak sentiment across most sectors, the pharma sector helped the domestic market close on a flat note with a positive bias,” said Vinod Nair, head of research at Geojit Financial Services.

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor