Market mayhem: Sensex slips 1688 points, Nifty tests 17,000-level—Factors that spooked markets on Friday

Indian stock markets witnessed a massive selloff on Friday amid multiple global factors. Domestic equity benchmarks Nifty50 and S&P BSE Sensex tanked nearly 3 % each weighed down by metal, auto, realty and power stocks. The Sensex fell by nearly 1700 points, while Nifty slipped touched 17,000 at the closing hours on Friday. The only positive from the today's session was pharma shares. Cipla, Dr Reddy and Divis Lab gained between 2 to 7 per cent on Nifty in the afternoon trade on Friday. JSW steel, Hindalco, BPCL, Tata Motors and Tata Steel corrected between 5 to 8 per cent. Nifty Realty and Nifty metal slid the most as the indices corrected  6.72% and 5.40% on the last trading day of the week..

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Asian market and new Covid variant in South Africa  

The triggers largely came from Asian markets which opened in the negative on Friday. Japanese index Nikkei 225 was trading lower by 660 points to 28, 838, Hang Seng index was also down nearly 1 per cent (0.96%) or 237 points to 24,502, while China's Shanghai Composite were down 0.23% to 3,576 around 7.10 am on Friday.    

In the afternoon trade around 1.45 pm, Nikkei 225 corrected over 2.5%, Hang Seng Index 2.34%, Shanghai Composite was down 0.56% and Asia Dow was trading 1.92% lower over fears of a new Covid variant detected in South Africa that could be could be more infectious than Delta.

Oil prices
Stocks and oil prices fell even on Friday amid concerns of global investors in view of new Covid variant. Brent slid nearly 4% to below $80 a barrel on Friday as a new COVID-19 variant spooked investors, adding to concerns that a global supply surplus could swell in the first quarter following the release of crude reserves by the United States and others, said Reuters. Earlier, Oil prices dipped in thin trading on Thursday amid the U.S. Thanksgiving holiday.

Lockdown situation
A rise in Covid cases in Europe and a new variant, detected in South Africa, has prompted Britain to introduce travel restrictions on South Africa and capped downside in bullion. Austria imposed a nationwide 10-day lockdown after its daily virus deaths tripled, while Italy imposed curbs on activity by unvaccinated people. The US government advised Americans to avoid Germany and Denmark. Morocco too suspended flights from France after its daily new cases spiked above 30,000, said a Reuters report.

Thanksgiving holiday

The US Markets remained closed on Thursday, November 25, on account of Thanksgiving 2021 and will close early on discounted shopping bonanza Black Friday. Lack of triggers from the US markets also did not augur well for the Indian markets.  

FIIs selling pressure & inflation  

Amid looming Covid risks, FIIs remained net seller to the of Rs 2,300 crore in the Indian equity cash market on November 25. Also, the annual rate of inflation in the US hit 6.2% in October. It is the highest figure in more than three decades.