Covid fears erode ₹4.4 tn wealth

The Nifty fell 186.20 points to close at 18,199.10 while the Sensex tanked 635 points to end at 61,067.24 points after markets gauged the whole import of the Centre’s advisory to step up genome sequencing for identifying fresh covid strains spreading from China.

The MPC minutes of its meeting on 5-7 December released after market closing showed the Reserve Bank of India governor voting against a pause in rate hikes on the ground of it being premature.

Underscoring investor fears was a rise in fear gauge India Vix by a whopping 12.93%, the most in six months, to 15.56. A rise in the Vix reflects uncertainty and increasing bearishness while a fall implies increased optimism.

Foreign institutional investors sold shares worth a provisional ₹1,119.11 crore even as the domestic institutional investors purchased a provisional ₹1,757 crore worth of equities. The rupee ended down 6 paise at 82.81 to the dollar.

Media, financial and metal stocks bore the brunt, while health care, FMCG and IT stocks rose on renewed fears of the pandemic’s resurgence.

UltraTech Cement, Bajaj Finserv, IndusInd Bank, Adani Ports and Adani Enterprises were the top drags on the Nifty, shedding between 2% and 6.32%. Sun Pharma was the top gainer, rising 1.67%, followed by HCL Tech, Tech Mahindra, TCS and Nestle India. Midcap and small cap indices underperformed the benchmark indices, falling by 1.58% and 2.24%.

“This was a kneejerk reaction to fears of a fresh outbreak in China and its likely fallout,” said Siddhartha Khemka, head of research (retail), Motilal Oswal Financial Services. “I expect 18,000 to be a strong support so long as the situation is perceived to be under control over the next few days.”