Mumbai: The market outlook remains bearish over the new Covid-19 variant Omicron. The scare over the variant led to a sharp fall in US and European markets on Friday, as investors turned risk averse, but the sharp fall in crude oil prices by over 11 per cent to $71.80 is a breather for the Indian market.
US market benchmark Dow Jones Industrial Average fell 2.53 per cent and Nasdaq fell 2.23 per cent. Even European indices FTSE (UK), DAX (Germany) and CAC (France) fell over 4 per cent.
"New Covid variant, FIIs’ behaviour along with macro numbers will be the key factors to drive the market this week," said an analyst.
"Covid-related developments will remain key triggers for the market. Market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of Covid whereas restrictions-related news across the globe will also cause volatility," said Santosh Meena, head of research, Swastika Investmart. "The behaviour of FIIs will also play an important role in the direction of our market because they are selling relentlessly for the last many days where they sold (equities) worth Rs 21,000 crore in the cash market last week and if we look at October-November data they have sold more than Rs 50,000 crore in the market," Meena said.
“We expect ongoing corrective phase to get arrested around 16900 in coming week. Therefore one should not construe current decline as a negative, rather accumulate quality large and midcap companies as structural uptrend remains intact,” said Dharmesh Shah, head– technical, ICICIdirect.
"Over the past 20 months all three intermediate corrections have measured average 9 per cent and retraced preceding rising segments by 38 per cent. With 8 per cent correction from 18600 behind us, we expect markets to maintain the rhythm as structural uptrend remains intact," Shah said.
The market is also expected to react to the second quarter GDP numbers on Tuesday and the monthly auto sales numbers on Wednesday, analysts said.
