Sensex Ends Whopping 1700 Pts Lower, Covid Fears See Global Meltdown In Stocks

Indian stock markets plunged in trade with the Sensex and the Nifty falling sharply today, thanks to worries over a new covid variant detected in South Africa.

Asian markets dived and European markets were down more than 3% after reports Scientists in South Africa and the World Health Organization are studying the recently identified variant described as very different to previous versions.

The U.K. and Israel banned flights from South Africa and some other African countries. The Japanese Nikkei ended the day lower by a whopping 2.50%, while the Hong Kongs Hang Sang too was down 2.5%.

The Nifty ended the day lower by 509 points, while the Sensex ended the day lower by 1666 points. Metal stocks saw massive losses with JSW Steel and Hindalco seeing cuts of near 6%.

Banking stocks to plunged with IndusInd Bank and State Bank among the biggest heavyweight banking losers.

Says Hemang Jani, Head of Equity Strategy & Senior Group VP, Broking & Distribution, Motilal Oswal Financial Services,"Equity markets have plunged almost 2% amid the emergence of a new, highly mutated Covid-19 variant. EU announced temporary ban of flights from South Africa and few EU countries are already under full lockdown scenario. Thus there is fear of this new variant spreading to other countries which might again derail the global economy. Already there is uncertainty as to when the US Fed will start raising interest rates. So markets might continue to reel under pressure and would actively track covid situation globally."

According to Ravi Singhal, Vice chairman, GCL Securities Limited the market seems to be poor from here as well. "Our goal is to reach 16750 and as a Fibonacci extension from March 2020 high and lows to 18600 high. Furthermore, after a 10% correction, the high comes in at 16750. Furthermore, the daily chart's head and shoulders breakdown target has just hit 17700. Not to forget, the Coronavirus cases are also on the rise all around the world. In India, there is also the possibility of a third wave, and the dollar index is approaching 97," he stated.