Sensex slumps over 350 points in early trade; Nifty drops below 17,300

The 30-share index slumped 356.6 points or 0.61 per cent to 57,926.82 in the opening trade. Similarly, the Nifty fell 98.35 points or 0.57 per cent to 17,269.90.

Bajaj Finance was the top loser in the Sensex pack, shedding over 1 per cent, followed by HDFC, Kotak Bank, IndusInd Bank, M&M, Bajaj Auto and Bajaj Finserv. On the other hand, PowerGrid, Dr Reddy’s, NTPC and ITC were among the gainers.

In the previous session, the 30-share equity benchmark slumped 503.25 points or 0.86 per cent to settle at 58,283.42, and Nifty fell 143.05 points or 0.82 per cent to 17,368.25.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,743.44 crore on Monday, according to the exchange data.

Even though it is early days, the fast spread of the Omicron virus, particularly in the UK, has added to the risk-off in global markets, said VK Vijayakumar, Chief investment Strategist at Geojit Financial Services.

“In this backdrop, the FIIs got another excuse to further press selling particularly in their large holdings such as HDFC twins and RIL, taking FII selling in December, so far, to around Rs 19,000 crore. The sharp decline in these heavy weights dragged the benchmark indices sharply,” he said.

The immediate trend in the market will be determined by how Omicron pans out and its impact on economic activity, he said, adding if it turns into a third wave in India, the markets would correct sharply. On the other hand, if this passes off like the Delta variant, the markets will rebound smartly.

Elsewhere in Asia, bourses in Shanghai, Tokyo, Seoul and Hong Kong were trading with significant losses in mid-session deals.

Stock exchanges on Wall Street too ended in the red in the overnight session. Meanwhile, international oil benchmark Brent crude fell 0.48 per cent to USD 74.03 per barrel.