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A massive foreign fund outflow triggered by the panic among the investors over the new Covid-19 variant found in southern Africa plunged the key equity indices -- S&P BSE Sensex and NSE Nifty50 -- deep into the red on Friday.

The fall of about 1,687 points in Sensex and 509 points in Nifty50 was triggered by FIIs' selling, which occurred after the 'B.1.1529' strain of Covid-19 was identified in South Africa, and later detected in Botswana and Hong Kong.

The new strain is reported to contain up to 30 identified mutations. It is said to be a more transmissible variant of Covid-19.

Notably, the FIIs sold Rs 5,785.83 crore on the BSE, the NSE and the MSEI in the capital market segment during the day's trade.

And not just in India, but FIIs also sold in Asian and European markets with falls up to 2.5-3 per cent.

"On the domestic front, broad-based sell off was witnessed as investors dumped the Covid-sensitive stocks while focus was shifted towards the pharma sector amid growing concerns over the new variant with higher mutations," said Vinod Nair, Head of Research at Geojit Financial Services.

According to Deepak Jasani, Head of Retail Research, HDFC Securities: "Stock markets nosedived across the globe on Friday, heading for their largest weekly drop in almost two months after a new Coronavirus variant sparked concerns.

"The scare sent investors scurrying to the safety of bonds, the yen and the Swiss franc. One view is that due to the thin liquidity levels in trading in Asia as a consequence of holidays in thwe US, the reaction does appear to be outsized."

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, said: "The domestic market has corrected 9 per cent from its peak as weak global cues, persistent selling by FIIs and premium valuation has made the investors cautious.

"Going ahead, the market is likely to continue being under pressure till clarity emerges as to how dangerous this new Covid variant can be."

In such a scenario, Khemka cited that it is wise to grab the opportunity and invest in stocks that are backed by strong fundamentals and sound management.

"Blue chip stocks, which act as safe havens for the investors, provide a good entry point at lower levels to invest from a long-term perspective. Also, one can look for defensive sector stocks."

On an overall basis, the barometer 30-scrip Sensex fell a massive 1,687 points or 2.87 per cent to 57,107 points from its previous close on Friday.

Similarly, the broader 50-scrip Nifty closed the day at 17,026 points, down by 509 points or 2.91 per cent from its previous close.