Indian stocks drop 3% as Omicron’s surge threatens global economic recovery

A woman walks past the Bombay Stock Exchange (BSE) building in Mumbai, India on January 31, 2020. REUTERS / Francis Mascarenhas / File Photo

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BENGALURU, Dec. 20 (Reuters) – Indian stocks plunged to their lowest level in nearly four months on Monday as raging Omicron infections threatened to jeopardize global economic recovery, while Future Group stocks rose after antitrust officials of the Landes had suspended a deal with

The NSE Nifty 50 Index (.NSEI) fell 2.6% to 16,549, at 0915 GMT, and the S&P BSE Sensex (.BSESN) benchmark fell 2.5% to 55,611.28. Both indices fell as much as 3% during the session.

The Netherlands were locked down on Sunday, and the possibility of further COVID-19 restrictions being imposed before the Christmas and New Year holidays loomed in several European countries as the Omicron variant spreads rapidly. Continue reading

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“The pace broke when the US Federal Reserve, along with other global central banks, changed its stance last week. The Omicron variant also worries the markets as its transmission is higher than other variants,” said Saurabh Jain, vice president of SMC Securities in New Delhi.

“The decline is also due to the continued sales by foreign institutional investors. The liquidity reduction by the central banks will have an impact.”

With the Nifty 50 down more than 10% from its record high in October, the index is now in correction territory, analysts at Deutsche Bank said in a statement.

Nifty 50 chart

The Nifty Volatility Index (.NIFVIX), which shows the level of volatility traders expect to see in the Nifty50 index over the next 30 days, rose 10%.

The Nifty Metals Index (.NIFTYMET) and Realty Index (.NIFTYREAL) were the biggest losers, by more than 4% and 5% respectively.

Shares in Future Group’s companies rose about 20% after the country’s antitrust authorities suspended Inc.’s 2019 deal with the group, potentially making it easier for Reliance Retail to buy Future’s retail business. Continue reading

Shares of Shriram Properties, which are listed on the Mumbai markets, at a discount of about 24%.

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Reporting by Nallur Sethuraman in Bengaluru; Editing by Devika Syamnath, Subhranshu Sahu and Sherry Jacob-Phillips

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