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How will Omicron Variant impact the stock market?

How will Omicron Variant impact the stock market?

Published on 06 January 2022 Views 5 Comments 0

The new variant of Covid-19, Omicron has led to a speedy rise in the covid cases in the country in the past 7-10 days, where the general case count was at around 9,000 cases a day in the last week of December 2021, which has now increased to almost 37,000 cases a day at the beginning of 2022. So, Let’s discuss how this Omicron Variant will impact the Indian Stock Market as we move ahead in this article.

Is Omicron Variant a threat to the Indian Stock Market:

  • The new Omicron variant of Covid-19 is spreading much faster than the previous variant ‘Delta’ which caused the second wave of Covid-19 in the country.
  • The rising cases especially in Mumbai and Delhi show that this variant is more infectious and spreads much faster than the previous variants. For instance, the Covid-19 cases have increased from around 600 cases a day to around 8,000 cases a day in just a matter of 7 days.
  • Cities like Mumbai, Delhi carries much value in terms of Direct Tax Collection states, whereas Maharashtra itself alone contributes 33% to the Direct Tax Collection of the country.
  • If we take a brief look at the conditions of foreign nations, then the countries like the US, France, etc are recording a high number of cases that are breaking the previous high cases of the previous Covid-19 waves in the country by multiple times. But the big positive here is that Death Percentage is not in line with the cases count, as it is around 10%-15% of Last Wave Peak.
  • This new variant ‘Omicron’ can be considered as a ‘Known Devil’ as the stock market does not correct itself twice for the same reasons. Recently, Indian Stock markets witnessed a fall from 18,600 levels to around 16,900 levels, reporting near to 10% corrections.
  • Moreover, it is considered as the natural vaccine, which will create herd immunity among the populations.
  • As of now, it doesn’t seem that there are going to be any serious lockdowns, but Yes, there could be some restrictions like night curfew, etc. which can have an impact of around 10%-15% on the overall economic activity. Further, if there is any impact on the global front, then the central banks of the nations will surely step and forward and provide easy liquidity which could be positive for the market.

What Lies Ahed:

With no second thought, if the third wave of Covid-19 severely hits India, then there will be some impact on the economic activity of the country, but not on a higher note. Also, there should not be any major impact on the stock market as well. At this point, an investor should follow a staggered approach to investment and avoid any lumpsum investment.

Originally Published On: https://blog.investyadnya.in/how-will-omicron-variant-impact-the-stock-market/

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