Nifty sees biggest decline since 26 Oct thanks to FII selling, rising Covid cases in Kerala

The Nifty saw the biggest single-day decline since 26 October, caused by factors ranging from profit booking by FII before the Christmas holidays, to Kerala reporting 292 active Covid-19 cases and three deaths on Tuesday, said Vaibhav Vidwani, research analyst at Bonanza Portfolio. The total number of active cases in Kerala presently stands at 2,041.

At close on Wednesday, Nifty was down 302.95 points or 1.41 per cent at 21,150.15, while Sensex was down 930.88 points or 1.30 per cent at 70,506.31.

While ONGC Ltd extended advances for a second consecutive session, touching a six-year high of Rs 212, Oil India Ltd reached an all-time high of Rs 406.

With the price of crude oil stabilising at $79.35 per barrel, the government made the decision to reduce the tax on surplus earnings from the export of domestically produced diesel and crude oil.

The reduction in the windfall profit tax contributed to the rally in the market.

Vinod Nair, head of research at Geojit Financial Services, said the domestic market saw a sharp and abrupt sell-off in the second half, despite the positive trend in global peers.

This is attributable to profit booking from the recent sharp rally stretching valuations of mid- and small-cap stocks. The recent uptick in crude prices prompted investors to book profits. Most of the sectors witnessed decline, with the lowest fall being recorded in FMCG, banking, and IT.