Markets skid amid weak global cues
A day after scaling the historic 50,000-mark, the BSE Sensex index plunged 746 points, or 1.5%, on Friday to close at 48,878.54, as investors sought to book profits at higher levels. The broader Nifty index also dropped 218.45 points or 1.5% to close at 14,371.90.
Stocks in the Asia-Pacific also traded lower, with Hong Kong’s Hang Seng falling 1.6%, China’s Shanghai Composite 0.4%, Japan’s Nikkei 0.44% and South Korea’s Kospi 0.64%. Investor sentiment was also hurt by worries of new covid curbs in China as undetected virus infections could spread quickly during the Lunar New Year holiday.
Rusmik Oza, head of fundamental research, Kotak Securities, said, “We are seeing some kind of profit-booking at higher levels as the Sensex touched the psychological mark of 50,000 points this week. The persisting rise in cases has intensified restrictions in parts of Europe, the UK and Hong Kong, which is impacting global markets. We can expect volatility to remain high next week also as there will be the monthly expiry and it will be the last week before the Union budget.”
Oza feels the Nifty could remain in the 14,000-15,000 range till budget and any break-out or break-down from this range is likely only afterwards.
The India volatility index, or the VIX, which indicates a rise in fear and anxiety among investors, rose 1% to end at 22.42 on Friday.
Though elevated valuations have made analysts cautious, they said the profit-booking will not last long and any favourable announcement by the finance minister Nirmala Sitharaman on 1 February will spark another rally.
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