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Indian stocks reverse early gains to fall on omicron worries

By Anoop Agrawal

10:47, 30 November 2021

Bombay Stock Exchange building
Indian stocks end lower in volatile trade – Photo: Shutterstock

Indian benchmark equity indices ended lower as stock markets closed on Tuesday, giving up sharp gains recorded in opening trade as investors chose to book profits amid concerns of the new coronavirus variant spreading. 

The projection of economists promising a strong gross domestic product growth rate for the quarter ended 30 September could not cheer up the markets as metal and automobile company stocks led the decline today, while realty and software companies were able to hold on to their gains. 

Tata Steel, the nation’s largest maker of steel, fell the most among the index constituents followed by Kotak Mahindra and JSW Steel. These stocks fell 3.9%, 3.8% and 2.7% respectively. Shares of state-owned Power Grid and Titan Industries led the gainers with a 3.2% and 2.2% rise respectively.

The National Stock Exchange’s 50-share Nifty50 index ended 0.4% lower at 16,983.2 points, while the S&P BSE 30-share Sensex declined 0.34% to close at 57,064.8 points. 

Volatility in markets

“In a highly volatile trading day, the street began on a very positive note on expectations of record GST numbers for November in line with the trends shown by e-way bills. However, post the views of the Moderna CEO on the Omicron variant, markets witnessed selling pressure,” said S Ranganathan, head of research at LKP Securities.

“While key data points for November like the auto numbers were seen playing out, profit-booking by foreign investors kept investors watchful. The small-cap 100 index, however, was seen buzzing around through the day on the back of the MSCI semi-annual review,” he added.

The Nifty Metals index, a basket of 15 company stocks, fell 1.94% today. The realty index ended 0.6% higher. 

“Nifty had an extremely volatile session today, after making a high of 17324, it closed at 16970, down by almost 350 points from the top. This is a bearish sign and Nifty may retest 16850 levels in the next few sessions. Traders are advised not to initiate any new longs in the current markets, ” said Gaurav Udani, chief executive officer at ThincRedBlu Securities.

Looking for directions amid omicron

“India VIX in the domestic market was around 17-18 levels during most of November, indicating limited market downside,” said Naveen Kulkarni, chief investment officer, Axis Securities. The India VIX is a volatility index based on the Nifty index option prices. 

“Volatility spiked by 25% on Friday…led by rising concerns on the new Covid-19 variant, making investors cautious. Further, an increase in the new variant cases will be a short-term negative for the equity market. Currently, VIX trading around 21 levels signifies an increase in cautiousness, as compared to the previous week. Volatility is likely to continue for some more time, as the direction of the new variant, oil prices, and the dollar index will further drive the market fundamentals,” added Kulkarni.


44,197.60 Price
+1.870% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


16,080.90 Price
+0.500% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030


2,004.85 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.50

Concerns over the new coronavirus variant termed omicron weighed on the underlying investor sentiment across the globe including India even Asian markets remain mixed in their reactions to the new variant. 

New listings

Shares of women’s bottom wear brand Go Colors operator Go Fashion made its debut on the bourses today with an 89.9% gain over its initial public offering (IPO) price of INR609. The company raised INR10.14bn ($135m) from the initial share sale offer, which was subscribed 135.46 times when it was open to investors during 17-22 November. The stock ended 81.2 % higher at INR1,250 on the National Stock Exchange.

“We like Go Fashion considering, being the first company to launch exclusive brand dedicated to women’s bottom wear, investment in digital and omnichannel engagement, focus on e-retail, distributive growth strategy to tap customers from tier 1 to tier 3 cities and expansions plans for existing and newer geographies,” said Vinod Nair, head of research at Geojit Financial Services.

“A growing number of working women, rise in disposable income, consumer shift towards buying from safe and hygienic facilities triggered by Covid-19 augurs well for the company. The opening-up of markets will support revenue growth going forward. With strong appreciation over the offer price, it appears the current positives are largely factored in. Given the solid listing, profit booking is expected, long-term investors can accumulate the stock in the dip,” Nair added.

Outlook for tomorrow

The course of domestic equity indices would be determined by the economic growth data to be unveiled by the government late evening today, which is expected to announce a robust GDP growth rate, as projected by economists.   

India’s economic growth for the July-September period would be the fastest in five years after activity revived in the quarter from Covid-led lockdowns, shows a poll of economists conducted by The median of estimates made by five economists shows the GDP growth for the quarter ended 30 September to be at 8.3% – the highest since the comparable quarter of the financial year 2016-17.

Investors also await the monthly automobile sales data due on 1 December and tax collection figures from the government as the search for cues in the market.

Read more: Omicron scare pushes global risk assets lower


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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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