New Delhi, Nov 26th : .The panic over the discovery of Covid-19 in southern Africa has caused a global crash in equities.This panic has decimated crude oil prices, which fell to 5.5 percent on Friday. However, safe haven assets like gold saw an increase in prices.According to the Indian Bullion and Jewellers Association, gold traded at Rs 47.993 per 10 grams, an increase of around Rs 300 over the previous day.
Initially, Friday’s news of a new Covid-19 version in southern Africa sparked an investor frenzy to buy risky equities.
The new variant’s impact initially affected Asian markets but quickly spread to Europe, and other global markets.
India’s key equity indices, S&P BSE Sensex (India) and NSE Nifty50 (India) closed sharply lower Friday.
The 30-scrip Sensex barometer closed at 57.107 points.This was down by 1,687 point or 2.87 percent. The wider 50-scrip Nifty closed day at 17,026 points.This is a decrease of 509 points, or 2.91 percent.
Equities also saw a decline in crude oil prices by the close of the day’s trading.
Brent crude oil futures are currently trading at $77.77 per barrel in the US, a decrease of 5.5% from the previous close.
Ajay Kedia, a Mumbai-based analyst, stated that the sentiment was influenced by a sell-off in equities and a new Covid-19 variant, as well as the decision to release strategic crude oils reserves by certain countries.
Kedia stated that Brent crude oil support is at $73.5, and WTI support at $70 for next week.
Sriram Iyer, a Reliance Securities analyst, stated that both Brent and NYMEX crude fell this Friday afternoon in Asian trade.NYMEX fell almost 7 percent and brent over 5% as a new Covid-19 variation could hinder the recovery of demand at an time when a surplus in supply could rise in the first quarter of 2022.
Iyer stated that the focus now shifts to the OPEC+ meeting in December and how the group reacts to the sudden appearance of a coronavirus and the release of oil resources.
Following the lead of its global peers, crude oil prices at Multi Commodity Exchange of India fell by more than 5% on Friday.It traded at Rs 5,536 a barrel.
Friday’s fall in crude oil prices also saw guar gum contracts drop on India’s National Commodity Exchange.Guar gum, a derivative from guar seed is widely used in the shale oil drilling industries around the world.India’s Rajasthan state holds a near monopoly on guar cultivation.
Guar gum demand is usually proportional to crude oil.
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