Markets wilt for second day as fresh Covid worries spook investors

The Sensex slumped 635 points while the Nifty finished below the 18,200-mark on Wednesday as surging COVID cases in China and concerns over renewed outbreaks in other countries sapped risk appetite.

Three cases of Omicron subvariant BF.7, apparently the strain driving China's current surge of Covid cases, have been detected in India so far, official sources said. Different sets of data modelling indicate that China could be facing a massive death toll after it lifted its stringent zero-COVID policy.

Union Health Minister Mansukh Mandaviya on Wednesday reviewed the COVID-19 situation in the country and directed officials to be alert and strengthen surveillance.

Declining for the second straight day, the 30-share BSE benchmark Sensex tumbled 635.05 points or 1.03 per cent to settle at 61,067.24. The broader NSE Nifty declined 186.20 points or 1.01 per cent to end at 18,199.10.

IndusInd Bank was the biggest laggard in the Sensex pack, shedding 2.28 per cent, followed by Maruti Suzuki, UltraTech Cement, Bajaj Finserv, ICICI Bank, Tata Motors and Axis Bank.

Sun Pharma topped the index gainers' chart with a jump of 1.67 per cent. HCL Technologies, Tech Mahindra, TCS, Nestle India, Wipro and Infosys were the other winners, climbing as much as 1.01 per cent.

"Bears continued to cause havoc in the domestic market while Wall Street snapped its losing streak ahead of the release of the US GDP numbers. Though all other sectors bled, pharma stocks were on a high owing to renewed fears of a global COVID outbreak, and IT witnessed bargain buying," said Vinod Nair, Head of Research at Geojit Financial Services.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said COVID-related sectors like pharma and diagnostics were in the limelight in Wednesday's session and are expected to maintain momentum.

"On the other hand, sectors like travel and tourism, hotels, airlines, entertainment and retail may witness some pressure. Given the concern over the resurgence of pandemic once again along with recessionary fear, we expect market volatility to continue," he noted.

In the broader market, the BSE smallcap gauge tumbled 2.18 per cent and midcap index declined 1.40 per cent.

Among sectoral indices, utilities declined 2.50 per cent, followed by power (2.40 per cent), services (2.34 per cent), telecommunication (2.32 per cent), industrials (2.13 per cent) and commodities (1.91 per cent).

Healthcare and IT ended in the green.

Elsewhere in Asia, equity markets in Seoul, Tokyo and Shanghai ended lower, while Hong Kong logged gains.

Equity exchanges in Europe were trading in the positive territory in mid-session deals. The US markets had ended higher on Tuesday.

Benchmark indices dropped yet again on the back of COVID scare in China and elsewhere, said S Ranganathan, Head of Research at LKP Securities.

International oil benchmark Brent crude climbed 1.08 per cent to USD 80.85 per barrel.

The rupee declined 10 paise to settle at 82.80 (provisional) against the US dollar on Wednesday.

Foreign institutional investors (FIIs) bought shares worth a net Rs 455.94 crore on Tuesday, according to exchange data.