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Indian equity benchmarks suffered sharp losses on Friday tracking a sell-off across global markets. Barring pharmaceutical and healthcare stocks, all sectors slid deep into negative territory. Benchmark indices started gap-down on Dalal Street, as traders were concerned as WHO flags new Covid-19 strain. World Health Organization officials met on Thursday to discuss a new coronavirus variant circulating in South Africa and Botswana. The new variant, called B.1.1529, carries an unusually large number of mutations, Francois Balloux, director of the UCL Genetics Institute. Also, foreign fund outflow dented sentiments in the markets. Foreign portfolio investors (FPIs) remained net sellers for Rs 2300.65 crore in the Indian markets, provisional data showed on the NSE. Market participants remained cautious as a report by ICRA said that the Reserve Bank of India's revision of bad loan recognition and upgradation norms could bring a sharp spike in the non-performing assets of non-banking finance companies (NBFCs) in the country

Indices continued to languish at lower levels with deep cuts in second half of the session, as some concern came with the CBDT said that the Income Tax Department has detected huge unaccounted income after it raided some Indian companies and their associates, being controlled by a neighbouring country, in Delhi, Maharashtra and Gujarat. Traders overlooked Moody's Investors Service stating that India's rising vaccination rate, stabilizing consumer confidence, low interest rates and higher public spending underpin positive credit fundamentals for the corporate sector. It also expects India's economic growth would rebound strongly with GDP expanding 9.3 per cent in the current fiscal ending March 2022 and 7.9 per cent in 2023. Traders also paid no heed towards Niti Aayog Vice-Chairman Rajiv Kumar’s statement that the government is committed to improving the ease of doing business in the country.  He stated ‘It is now one of the commitments of this government to try and resolve and improve the ease of doing business on the ground.’

On the global front, Asian markets settled lower on Friday, while European markets were trading lower, after scientists in South Africa identified a concerning new variant of the coronavirus, whose mutations mark a big jump in evolution. Britain and Israel temporarily banned flights from South Africa and five neighboring countries as a precautionary measure. Worries about inflation and bets of faster monetary policy tightening in the U.S. also dented sentiment, heading into the weekend. According to Goldman Sachs Group, the Fed is likely to double the pace at which it tapers bond purchases to US$30 billion a month from January. Back home, on the sectoral front, pharmaceutical shares ended in green despite credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the Indian pharmaceutical market (IPM) delivered slower growth of 5.0% in October 2021 than 12.4% in September 2021.

Finally, the BSE Sensex fell 1687.94 points or 2.87% to 57,107.15 and the CNX Nifty was down by 509.80 points or 2.91% to 17,026.45. 

The BSE Sensex touched high and low of 58,254.79 and 56,993.89, respectively and there were 4 stocks advancing against 26 stocks declining on the index.    

The broader indices ended in red; the BSE Mid cap index fell 3.23%, while Small cap index was down by 2.61%.

The lone gaining sectoral indices on the BSE was Healthcare up by 1.18%, while Realty down by 6.42%, Metal down by 5.36%, Auto down by 4.28%, Basic Materials down by 4.03% and Industrials down by 3.92% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 3.32%, Nestle up by 0.35% and Asian Paints up by 0.01%. On the flip side, Indusind Bank down by 6.01%, Maruti Suzuki down by 5.27%, Tata Steel down by 5.23%, NTPC down by 4.84% and Bajaj Finance down by 4.60% were the top losers.

Meanwhile, investments in Indian capital markets through participatory notes (P-notes) rose to Rs 1.02 lakh crore till October-end, making it the highest level in 43 months. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. However, they need to go through a due diligence process.

According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- was at Rs 1,02,553 crore by October end. This was the highest level since March 2018, when P-notes had invested to the tune of Rs 1,06,403 crore. Of the total Rs 1,02,552 crore invested through the route till October, Rs 93,213 crore was invested in equities, Rs 8,885 crore in debt, Rs 455 crore in hybrid securities.

At the end of September this year, the investment level was at 97,751 crore, Rs 97,744 crore by August end. The figure for July was revised to Rs 85,799 crore from Rs 1,01,798 crore posted earlier. Prior to that, the investment level was at Rs 92,261 crore by June-end, Rs 89,743 crore by May-end, Rs 88,447 crore at April-end, and Rs 89,100 crore by March-end.

The CNX Nifty traded in a range of 17,355.40 and 16,985.70 and there were 4 stocks advancing against 46 stocks declining on the index.  

The top gainers on Nifty were Cipla up by 7.23%, Dr. Reddy's Lab up by 3.45%, Divi's Lab up by 2.92% and Nestle up by 0.38%. On the flip side, JSW Steel down by 7.48%, Tata Motors down by 6.77%, Hindalco down by 6.57%, Adani Ports &SEZ down by 6.22% and Indusind Bank down by 6.19% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 193.93 points or 2.65% to 7,116.44, France’s CAC decreased 232.65 points or 3.29% to 6,843.22 and Germany’s DAX decreased 419.88 points or 2.64% to 15,498.10.

Asian markets settled lower on Friday on fears about the global economic outlook following identification of a new and possibly vaccine-resistant corona-virus variant in South Africa, and has also been detected in Hong Kong. World Health Organization (WHO) officials said they are monitoring a new variant with a large number of mutations. A special meeting is scheduled today to discuss its implications for vaccines and treatments. Japanese shares hit one-month low as the safe-haven yen rallied against the US dollar. Further, Chinese shares declined as a handful of corona-virus cases in eastern parts of China prompted Shanghai to limit tourism activities and a nearby city to cut public transportation services.

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