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India Shares Dip 3%, Omicron Surge Threatens Global Recovery

BENGALURU, Dec 20 (Reuters) - Indian shares slumped on Monday to their lowest in nearly four months as raging Omicron infections threatened to derail global economic recovery, while Future Group stocks jumped after the country's antitrust agency suspended a deal with

The NSE Nifty 50 index was down 2.6% at 16,549, as of 0915 GMT, and the benchmark S&P BSE Sensex dropped 2.5% to 55,611.28. Both the indexes fell as much as 3% during the session.

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

"The tempo broke when the U.S. Federal Reserve changed its stance along with other global central banks last week. The Omicron variant is also troubling the markets as its transmission is higher than other variants," said Saurabh Jain, assistant vice-president at SMC Securities in New Delhi.

"The fall is also a result of continuous selling by foreign institutional investors. The rollback of liquidity by central bankers will have some kind of repercussions."

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

The Nifty volatility index, which indicates the degree of volatility traders expect over the next 30 days in the Nifty50 index, was up 10%.

The Nifty metals index and the realty index were the top losers, each down more than 4% and 5%, respectively.

Shares of Future Group companies surged about 20% after the country's antitrust agency suspended Inc's 2019 deal with the group, potentially making it easier for Reliance Retail to buy Future's retail business.

Shares of Shriram Properties listed in Mumbai markets at a discount of about 24%.

Reporting by Nallur Sethuraman in Bengaluru; Editing by Devika Syamnath, Subhranshu Sahu and Sherry Jacob-Phillips

Source: Reuters

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