Indian stocks fall 2% as Omicron threatens global economic growth

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 fell to an almost four-month low on Monday as rising Omicron cases and renewed lockdowns threatened to derail the global economic recovery, while stocks of the Future Group surged after the country’s antitrust agency suspended a deal with Amazon. com.

The NSE Nifty 50 Index (.NSEI) closed down 2.2% to 16,614.20, and the benchmark S&P BSE Sensex (.BSESN) fell 2.1% to 55,822.01 . Both indices fell as much as 3% earlier in the session.

The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions being imposed before the Christmas and New Year holidays loomed in several European countries as the Omicron coronavirus variant spreads rapidly. Read more

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

Omicron remains one of the biggest problems for the markets and dramatically clouded the outlook towards the end of the year, Deutsche Bank said.

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The Nifty Volatility Index (.NIFVIX), which indicates how much volatility traders expect over the next 30 days in the Nifty50 index, rose 16%.

All sector indices were trading in the red on Monday and only three stocks in the Nifty 50 index managed to close higher.

The Public Sector Nifty Index (.NIFTYPSU) and Real Estate Index (.NIFTYREAL) were the biggest losers, down more than 4% each.

Shares of Future Group companies jumped about 20% after India’s Competition Commission suspended Inc’s deal with the group in 2019, potentially allowing rival Reliance Retail to more easily purchase Future’s retail operations. Read more

Shriram Properties shares listed on the Mumbai markets at a discount of around 24%.

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Reporting by Nallur Sethuraman in Bangalore; Editing by Sherry Jacob-Phillips

Our Standards: Thomson Reuters Trust Principles.

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