Sensex drops over 200 points in early trade; Nifty slips below 13,700

Equity benchmark Sensex dropped over 200 points on December 21, tracking weak cues from global markets amid concerns over a new strain of the virus leading to fresh restrictions in European countries.

The 30-share BSE index pared the gains to trade 202.44 points or 0.43% lower at 46,758.25.

Similarly, the broader NSE Nifty slipped 66.75 points or 0.49% to 13,693.80.

M&M was the top laggard in the Sensex pack, shedding around 2%, followed by ICICI Bank, PowerGrid, Axis Bank, SBI, ONGC and IndusInd Bank.

On the other hand, L&T, Reliance Industries, Sun Pharma, Infosys and HCL Tech were among the gainers.

In the previous session, Sensex settled at a record 46,960.69, up 70.35 points or 0.15%, while Nifty rose 19.85 points or 0.14% to 13,760.55 — its new closing high.

Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 2,720.95 crore on a net basis on Friday, according to provisional exchange data.

According to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, a new and faster-transmitting strain of the virus in the U.K. is an area of concern. Acceleration in the number of cases in the U.S. and poor economic data are other dampeners.

A number of European countries have banned flights from the U.K. as the British government warned that the potent new strain of the virus was “out of control” and imposed a stringent new stay-at-home lockdown from December 20.

However, the U.S. Congress agreement on $900 billion of fiscal stimulus is likely to support markets. High valuation continues to be a concern in India. But the power of FII-driven liquidity is overshadowing all negative news, he added.

Elsewhere in Asia, bourses in Seoul, Hong Kong and Tokyo were in the red in mid-session deals, while Shanghai was trading with gains.

Meanwhile, the global oil benchmark Brent crude futures were trading 3.20% lower at $50.59 per barrel.