Sensex down over 1,100 points at closing, Nifty below 16,700 amid heavy sell-off

Benchmark indices ended deep in the red on Monday amid a broad-based heavy sell-off as Omicron worries spooked investors.

The market opened on a negative note amid bearish global cues as the rising number of Omicron cases and its impact on an economic recovery worries investors. Indices slumped further during the day. Relentless FII selling also continues, weighing on investor sentiments.

The BSE Sensex closed at 55,822.01, down 1,189.73 points or 2.09 per cent. It recorded an intra-day high of 56,538.15 and a low of 55,132.68. The Nifty 50 closed at 16,614.20, down 371.00 points or 2.18 per cent. It recorded an intra-day high of 16,840.10 and a low of 16,410.20.

Nearly 2700 stocks decline

The market breadth remained in favour of the decliners, with 2,699 stocks declining on the BSE, as against 746 that advanced, while 121 remained unchanged. Further, 540 stocks hit the lower circuit as compared to the 353 stocks that were locked in the upper circuit. Besides, 267 stocks touched a 52-week high level and 90 touched a 52-week low.

The volatility index jumped 16.08 per cent to 18.97.

Parth Nyati, Founder, Tradingo said, "Indian equity markets are witnessing a sharp correction on the back of rising worries of Omicron, hawkish global central banks, and most importantly relentless selling by FIIs."

"We are seeing the first meaningful correction in the current bull run, and this correction has completed more than 10 per cent from highs," added Nyati.

Only three scrips -- Cipla, Hindustan Unilever, Dr Reddy’s closed in the green on the Nifty 50. BPCL, Tata Motors, Tata Steel, IndusInd Bank and Bajaj Finance were the top losers.

Vinod Nair, Head of Research at Geojit Financial Services said, "India has been undergoing a phase of consolidation in the last two months. Currently, a sell-off is due to a rapid rise in FIIs selling triggered by hawkish world central banks’ policy, a cautious view on the Indian market due to high valuation compared to peers and a drop in retail inflows.”

“We feel that we are reaching the last phase of this consolidation in terms of price correction. Some pockets have become fair. However, the overall market is still trading on the upper hand, which will continue to affect the performance of the broad market in the short term. Long-term investors can chip into high-quality stocks with a focus on defensives and India-focused businesses,” added Nair.

Pritesh Mehta, Lead Technical Analyst - Institutional Equities, YES Securities said, “The structure of the benchmark index has changed since November 2021. It is no longer a Buy on Dip market. With Nifty underperforming gold & bonds from the third week of October, recovery moves have been short-lived. Even within sectoral indices; except IT, relative strength is amiss. The breadth of the broader markets (i.e. in Nifty midcap 100, smallcaps 100 & 500 indices) is diminishing. In Monday’s session, Nifty fell below the low marked on November 29, 2021, implying further weakness.”

All in red

All sectoral indices closed in the red with realty, media, financials, auto, metals and oil & gas witnessing increased pressure.

Nifty Realty was down nearly 5 per cent, while Nifty PSU Bank was down 4.48 per cent. Nifty Media, Nifty Metal and Nifty Oil & Gas were down nearly 4 per cent each. Nifty Bank and Nifty Private Bank were down over 3 per cent each. Nifty Financial Services closed nearly 3 per cent lower while Nifty Auto was down 2.56 per cent.

Broader indices in red

The heavy selling extended to the broader market, with the broader indices closing in the red.

The Nifty Midcap 50 was down 3.84 per cent, while the Nifty Smallcap 50 closed 4.31 per cent lower. The S&P BSE Midcap was down 3.42 per cent, while the S&P BSE Smallcap was down 3.31 per cent.

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