Indian stock markets are expected to open positive on Monday despite worries over new Covid variants.
SGX Nifty, which at one point of time was ruling at 16,900, recovered sharply to currently rule at 17,090 (730 am), indicating a sharp bounce back. Nifty futures on Friday closed sharply lower at 17,052.
However, equities across the Asia-Pacific region are down between 0.4-0.8 per cent even as Dow and Nasdaq futures are up. According to analysts, these indicate that even global market participants are clueless and hence wild swings. Investors need to brace for volatility during intra-day deals.
The behaviour of FIIs will also play an important role in the direction of our market because they have been selling relentlessly for the last many days where they sold worth Rs 21,000 crore in the cash market last week, and if we look at Oct-Nov month data, then they have sold more than Rs 50,000 crore in the Indian market.
However, analysts expect the new variant to impact hotel, tourism, entertainment and travel sectors the most. At a time when these sectors just started to look up as most countries had decided to open up, suddenly the new variant has emerged, and again pushing back them in the corner, they added.
A new variant of Covid-19, named B.1.1.529, with over multiple spike mutations, was reported from southern Africa. The Union Health Ministry on Sunday came out with fresh guidelines for international travellers arriving in India from December 1. According to the guidelines, travellers will have to submit 14 days of travel details on the online Air Suvidha portal before the scheduled travel, along with the self-declaration form.
Santosh Meena, Swastika Investmart Ltd, said Covid related developments will remain key triggers for the market where the market would remain keenly interested to know the efficacy ratios of various vaccines against a new variant of Covid whereas restrictions-related news across the globe will also cause volatility.
"If we look at the derivative data then FIIs' long exposure in the index future stands at 59 per cent which is ok while the put-call ratio is sitting at 0.73 mark that is in oversold territory," he said and added "there is as such no major negative trigger for the Indian market while we have already outperformed so much in 2021 that our weight has increased significantly in MSCI emerging market index therefore we are just seeing a mean reversion".