Market recap for 21 December 2020

Nifty50 13,328 ▼ -432 (-3.1%)

Sensex 45,553 ▼ -1406 (-3%)

Today, the markets witnessed the biggest single-day fall since May 2020. All of the Nifty50 stocks ended the day in the red. 

All sectoral indices closed in the negative with the worst fall seen in Nifty PSU Bank (-6.9%) and Nifty Media (-6.2%).

Here are the top stories for the day.

New coronavirus strain shocks the markets

• The new strain of coronavirus found in the UK has shaken equity markets across the world. At the time of writing this edition of the market recap, major European markets were down 3% and Dow futures were down 1.6%. 
• Volatility was also seen in gold prices which, after gaining 1.4% in the morning, dropped by 1.2%. Meanwhile, the safe-haven US dollar saw a sharp jump of nearly 0.7%.

Travel stocks hit badly

• For weeks, it seemed like travel stocks were seeing light at the end of the tunnel. But, today, investors turned sellers after certain countries including India suspended flights from the UK till 31 December. In general, people could again turn cautious before travelling, whether globally or locally. 
• Airlines and hotel stocks were badly hit today as Indigo (-9.3%), Spicejet (-9.9%), Indian Hotels (-7.7%), EIH (-6.8%) and Chalet Hotels (-9.2%) saw heavy selling.

CAMS gains on business opportunity

• Amid the market chaos, India’s largest mutual fund registrar and transfer agent CAMS gained 4.3% coupled with above-average volumes. 
• Today’s rise continues the upward trend in the stock from last week during which it rose 6.8%. High investor interest was seen after the company announced last week that it could soon become a Central Record Keeping Agency under the National Pension Scheme (NPS). 

Closing bell

Markets hate uncertainty and the new virus strain has created just that. To return to normalcy, the markets would immediately need answers to these two questions: is this virus variant more damaging than its predecessor? Will the current vaccines work against it? Till the answers are known, there could be heightened levels of volatility, as indicated by the ~25% surge in the India VIX today. 

The Antony Waste Handling Cell IPO opens for applications today. Read more about the issue here. You can subscribe to the IPO with Upstox here.

Good to know

Bears and bear market

Bears are investors who believe that a stock or the overall market will decline. A bear market is a prolonged period of falling stock prices, usually by 20% or more.

Source: Nasdaq

Yay ? or  ? Nay?
We'd love your thoughts on this morning update.

Haven't tried out Upstox yet? Click here to open your account now!

Disclosures and Disclaimer

Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.