Post Market views - Dec 3, 2021 - Mr Vikas Jain, Sr. Research Analyst, Reliance Securities

The markets opened on a soft note on account as investors try to gauge the amount of damage the omicron variant of COVID-19 might inflict on the economy, as well as measures that the U.S. and other governments are taking to restrain it. US Dow Future slipped over 190 points or 0.6% lower as investors continue to be rattled by the new and highly infectious COVID-19 variant, omicron, which is spreading rapidly across the world.

Oil rose after the OPEC+ alliance decided to keep restoring supply, but also said it could revisit the decision at any moment due to high levels of uncertainty in the market. Brent Crude advanced 2% to $70/bbl following the decision by the producer group. The cartel agreed to add 400,000 barrels a day of crude to global markets in January in a move that should please major-consuming nations, especially the U.S.

In India, there was media reported that the 10-12 new COVID-19 variant of omicron cases were reported and its impact was visible in the market with Nifty50 to decline by 200 points on the last trading day of the week . Tech stocks are witnessing profit booking followed by FMCG and Infra to decline by 1% while auto, metal and cement stocks are trading flat.

NIFTY50 has declined by 9% from its all time high and bounced from the support in range of 16700-16800 levels being the recent bottoms. In the past in Aug-20 and Apr-21 we have bounced strongly after a 9% correction from their highs so the current support holds good.

On the higher side crossover of 17,800 would give a breakout from this corrective action as the previous support of 17,800 will act as resistance now. Any negative news flow from the global or domestic markets could breach 16,700 and might attempt to test the long term 200 day average of 16,100 levels.

Source : Equity Bulls

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