Benchmarks trade lower in volatile session amid Omicron jitters

Indian equity benchmarks made cautious start on Monday tracking weakness in the global peers. Soon, markets extended their losses but managed to trim losses and are trading lower with marginal cut in early deals. Buying in Energy, Telecom and Metal stocks were aiding the indices, whereas selling in Power, Utilities and Realty kept upside in check. Fears over the new variant of coronavirus kept sentiments in the markets cautious. AIIMS chief Dr Randeep Guelria said the new Omicron variant of coronavirus has reportedly got over 30 mutations in the spike protein region giving it the potential to reduce the efficacy of vaccines. Though, downside remained capped as some support came in with a private report that India’s economic recovery likely strengthened in the previous quarter, boosted by services activity that recovered after pandemic-related mobility restrictions were eased. Traders took note of the Reserve Bank’s statement that India’s forex exchange reserves increased by $289 million to $640.401 billion for the week ended November 19.

Global cues remained weak with most of the Asian markets traded lower following the broadly negative cues from Wall Street on Friday, as worries about the global economy due to resurgence of coronavirus cases in Europe and the detection of a new and possibly vaccine-resistant coronavirus variant in South Africa hit global risk sentiment. Countries have also begun to close borders to flights from African nations.

Back home, airline stocks were in focus as Union Health Ministry revised guidelines for international arrivals in India which will be effective from December 1. The existing guidelines have been revised in view of reporting of a new variant of SARS-CoV-2 (B.1.1.529; named Omicron) which has now been classified as a Variant of Concern by the World Health Organization. In scrip specific development, Reliance Industries traded lower after its telecom arm, Reliance Jio announced a 20% hike in tariff and new rates will come into effect from December 1.

The BSE Sensex is currently trading at 57048.94, down by 58.21 points or 0.10% after trading in a range of 56382.93 and 57307.95. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.01%, while Small cap index was down by 2.19%.

The few gaining sectoral indices on the BSE were Energy up by 1.36%, Telecom up by 0.33%, Metal up by 0.23%, Healthcare up by 0.15%, while Power down by 2.09%, Utilities down by 2.04%, Realty down by 1.70%, Consumer discretionary down by 1.50%, Industrials down by 1.44% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.21%, Dr. Reddy's Lab up by 2.05%, Indusind Bank up by 1.37%, Tata Steel up by 0.68% and HCL Technologies up by 0.62%. On the flip side, Asian Paints down by 1.78%, Bajaj Auto down by 1.75%, HDFC down by 1.75%, Hindustan Unilever down by 1.51% and Maruti Suzuki down by 1.48% were the top losers.

Meanwhile, Industry body -- The PHD Chamber of Commerce and Industry (PHDCCI) has urged the GST Council to rationalise rates and stated that the current rates are not in sync with the demand creation and employment generation in the country. Pradeep Multani, President, PHDCCI, said ‘We urge the government to rationalise the GST rates into three major slabs of 5 per cent, 10 per cent and 15 per cent along with a few sin goods in the slab of 28 per cent’.

He suggested that items in category of 12 per cent rate should be reduced to 10 per cent and goods in the category of 18 per cent rate should be reduced to 15 per cent. He added that there should not be more than 25 items in the category of sin goods.

Multani said ‘The rationalisation of the tax slabs would create tremendous demand in the economy, subside the inflationary pressures and enhance the sentiments of producers for production and create employment opportunities for the growing workforce in the country’.

The CNX Nifty is currently trading at 16968.45, down by 58.00 points or 0.34% after trading in a range of 16782.40 and 17068.80. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.30%, Indusind Bank up by 1.78%, Dr. Reddy's Lab up by 1.63%, HCL Technologies up by 0.77% and Tata Motors up by 0.59%. On the flip side, Adani Ports & SEZ down by 2.52%, Hero MotoCorp down by 2.23%, UPL down by 2.01%, Coal India down by 1.92% and Shree Cement down by 1.91% were the top losers.

Asian markets are trading mostly lower; Nikkei 225 declined 157.03 points or 0.55% to 28,594.59, Straits Times slipped 32.83 points or 1.04% to 3,133.44, Hang Seng lost 162.63 points or 0.68% to 23,917.89, Taiwan Weighted fell 13.97 points or 0.08% to 17,355.42, KOSPI plunged 16.66 points or 0.57% to 2,919.78 and Shanghai Composite was down by 1.39 points or 0.04% to 3,562.70, while Jakarta Composite rose 34.83 points or 0.53% to 6,596.38.