December cold grips equity markets; global selloffs gain pace -

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By S Jha

New Delhi, December 22: Bears held firm grips on the global equity markets. After the Indian stock markets dived deep in the red, selloffs in the US equity markets intensified. The China Covid explosion and the fear of the US Fed remaining hawkish with rate hikes plunged the Dow Jones by close to 2.5 per cent in the afternoon trade.

Sensex and Nifty rebounded from deep cuts during the day, which was a weekly expiry, bust steel closed with about a half percentage loss in the indices. The midcaps and smallcaps bore the brunt of the equity selloffs.

The indices remained in the arms of the bears despite heavy institutional buying into the equity markets. The foreign institutional investors turned buyers after a few days of continued selling to end the day with a net buy of Rs 929 crores. The domestic institutional investors continued with their buying spree in the equity markets, pumping in Rs 2207 crores. The Rs 3136 crores of the institutional buying into the Indian equity markets saved the bourses from deep cuts.

But the tech selloff continued in the US equity markets, as Dow Jones and Nasdaq were in the deep red after the data showed that the US Fed may not be giving up on the hawkish stance on the inflation front. The China Covid tsunami which is reportedly giving over 40 million of new cases on a daily basis has raised the concerns of the supply side stress in the near future, which may give further legs to inflation. Additionally, the China Covid’s spread in other countries is also being suspected with rising cases in Japan, South Korea, Italy and Brazil, which is reviving the 2020 scare of Beijing having sent the pandemic global.

Auto stocks were most bearish in the Indian equity market followed by metals and banking scrips. Out of the 30 stocks in Sensex, only seven were in the green, with Infosys ducking the trend. After a bullish November series, December has seen the indices losing heavily, The US indices have lost over six per cent in the December series. Sensex and Nifty have also mirrored the US markets, notching similar level of losses. The traders are being seen to be short on the markets in anticipation of the yearend selloffs further gaining pace in the global equity markets.