On a day when Reliance Industries’ Q4 earnings is expected, the country’s two main indices, Sensex and Nifty lost almost 2%. The Sensex fell by 984 points (1.98%) and Nifty by 264 points (NSE: 1.77%). RIL (-1.39%) , TCS (NSE:-2.42%) and banking stocks (Bank Nifty -2.77%) pulled down the benchmark indices. HDFC lost the most, closing 4.38% lower on NSE, while ICICI Bank (NSE:-3.37%) and Kotak Mahindra (NSE:-3.11%) Bank were the top losers.
It was not all bad, as shares such as ONGC(NSE: 4.32%) and Sun Pharma(NSE: 1.54%) gained.
More than ₹2.02 lakh crore of investor wealth was lost on this crazy Friday. The total capitalisation of companies listed on the BSE fell to ₹207.01 lakh crore. What caused the markets to fall?
Rising COVID numbers
On Thursday the country witnessed a record high 3.86 lakh fresh positive COVID-19 cases and more than 3,500 deaths. This had shocked the investor community and spread panic among all, resulting in a gap down opening for both indices. Having opened lower, the markets tried to regain some lost ground but eventually succumbed to selling pressure.
Shortage of vaccines
With the government now having opened up vaccination for all, reports of vaccine shortage spooked investors. Investors now fear that an economic recovery may seem more far off than initially anticipated.
No clear majority for BJP in exit polls
The exit polls of the four states and one Union Territory showed that BJP,the ruling party, did not have a sound majority in West Bengal. This has dashed the market sentiments.
Rising bond yields
The 10-year U.S Treasury bond yields rose to 1.690%. This is the highest in the past two weeks. The markets were wary of this and exercised caution and prudence.
High U.S. growth
The USA reported a growth rate of 6.4% in this quarter. The growth was primarily driven by the stimulus boost. The USA is on track to report it’s fastest growth in decades.
The Week ahead…
All eyes will remain on RIL’s Q4 earnings numbers and the rising COVID cases. These factors will primarily decide the market direction next week.