After erasing Thursday's gains on Friday, Indian markets ended the week with losses for the third straight week as a sharpest Covid 19 spike in India dents economic recovery outlook. For the week ahead, markets are said to witness the worst fall since May 2020.
"Markets continued to remain extremely subdued with losses during the course of the whole week, across sectors and segments. The main reason for the downtrend is the rising cases of the virulent pandemic which is causing unimaginable damage to human life across larger states," Joseph Thomas, head of research, Emkay Wealth Management said.
To assess the damage is a difficult call and that is why markets also have not seen a sharp movement thus far. Nonetheless the resurgence of coronavirus is sure to impact the earnings of India Inc. for atleast two quarters of the current year.
FIIs have been offloading their position from Indian markets. Nonetheless, Biden's proposal to impose a higher capital gains tax on those in the higher earnings slab will be beneficial for the markets, as this money will find its way into Indian markets, said analysts.
Also, analysts given the current development around Covid 19 believe that until Covid 19 situation reverses in India, the volatility in the markets shall continue to be high.