Indian shares tumble 2% as Omicron threatens global economic growth

·2-min read
FILE PHOTO: A woman walks past the Bombay Stock Exchange building in Mumbai

By Sethuraman N R

BENGALURU (Reuters) - Indian shares slumped on Monday to a near four-month low as rising Omicron cases and renewed lockdowns 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 closed 2.2% lower at 16,614.20, and the benchmark S&P BSE Sensex dropped 2.1% to 55,822.01. Both the indexes fell as much as 3% earlier in the session.

The Netherlands went into a 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 coronavirus variant spreads rapidly.

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

Omicron remains one of the biggest issues for markets and has significantly clouded the outlook moving into year-end, Deutsche Bank said.

The Nifty volatility index, which indicates the degree of volatility traders expect over the next 30 days in the Nifty50 index, was up 16%.

All sectoral indexes were trading in red on Monday and only three stocks in the Nifty 50 index managed to close higher.

The Nifty public sector index and the realty index were the top losers, down more than 4% each.

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

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

Graphic: Nifty 50 chart

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Sherry Jacob-Phillips)

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