Mumbai, Nov 26 : , A panicked investor over the new Covid-19 version in southern Africa triggered a massive outflow of foreign funds that plunged the equity indices S&P BSE Sensex & NSE Nifty50 deep into red on Friday. The selling of FIIs was responsible for the fall in Sensex of 1,687 points and Nifty50 of 509 points.This occurred after the ‘B.1.1529 strain of Covid-19 was discovered in South Africa and later found in Botswana, Hong Kong, and elsewhere.
According to reports, the new strain contains up to 30 mutations.
It is believed to be a more transmissible version of Covid-19.
Notably, the FIIs were able to sell Rs 5,785.83 crore on both the NSE and BSE during the day’s trading.
Not only in India, but also in Asian and European markets, FIIs are sold with falls up to 2.5-3 percent.
“On the domestic front there was a broad-based sell-off as investors dumped Covid-sensitive stocks, while the focus was shifted to the pharma sector amid growing concern over the new variant with higher mutants,” Vinod Nair Head of Research at Geojit Financial Services.
Deepak Jasani Head of Retail Research, HDFC Securities, stated that stock markets plunged around the world on Friday after a new Coronavirus variant raised concerns.
“The fear sent investors running to safety in bonds, the Japanese yen and Swiss francs.
One theory is that the outsized reaction to the lack of liquidity in Asia trading due to holidays in the US may be due to the low liquidity levels.
Siddhartha Kharma, Head of Retail Research, Motilal Oswal Financial Services said that the domestic market has corrected 9 percent from its peak due to weak global cues.
The persistent selling by FIIs, premium valuation, and weak global cues have made investors cautious.
“The market will continue to be under pressure until clarity emerges about how dangerous this new Covid variant is.”
Khemka stated that in such a situation, it is wise to seize the opportunity and invest only in stocks with strong fundamentals and sound management.
Blue chip stocks, which act like safe havens, offer a good entry point at lower levels for investors to invest long-term.
You can also look into stocks in defensive sectors.
The overall barometer 30-scrip Sensex dropped by a staggering 1,687 points, or 2.87 percent, to 57.107 points on Friday.
The broader 50-scrip Nifty closed at 17,026 points, a decrease of 509 points or 2.91 percent from its previous close.
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