Insight Online News
New Delhi, Nov 26 : After triggering a global crash in equities, the panic surrounding the new variant of Covid-19 discovered in southern Africa, devastated crude oil prices which crashed around 5.5 per cent on Friday.
On the other hand, safe haven assets such as gold saw a rise in prices. Gold traded at Rs 47,993 per 10 gm, up around Rs 300 from the previous day, according to the Indian Bullion and Jewellers Association.
Initially, on Friday, the news of a new Covid-19 variant found in southern Africa, triggered an investor frenzy to sell risky equities.
At first the impact of the new variant started to dent Asian markets, but it soon spread to Europe and other global markets too.
In India, key equity indices — S&P BSE Sensex and NSE Nifty50 — closed sharply lower on Friday.
The barometer 30-scrip Sensex closed at 57,107 points, down by 1,687 points or 2.87 per cent.
Similarly, the broader 50-scrip Nifty closed the day at 17,026 points, down by 509 points or 2.91 per cent.
Besides, equities, by the end of the day’s trade, crude oil prices too dampened.
At present, Brent crude oil futures in the US are trading at $77.77 a barrel, down 5.5 per cent from the previous close.
“Sell-off in equities, a new variant of Covid-19, coupled with the decision to release strategic crude oil reserves by some countries weighed on the sentiment,” said Mumbai-based analyst Ajay Kedia.
For next week, the support for Brent crude oil is seen at $73.5 and for WTI at $70, Kedia said.
Reliance Securities analyst Sriram Iyer said: “Both NYMEX and Brent crude crashed this Friday afternoon trade in Asian with NYMEX falling almost 7 per cent and brent over 5 per cent as a new Covid-19 variant could hamper the recovery of demand at a time when a supply surplus could swell in the first quarter in 2022.”
Now, the focus will shift to the OPEC+ meeting, due in early December, and how the group responds to the release of oil reserves and forecast demand with the sudden appearance of a new variant of the coronavirus, Iyer said.
Taking cues from its global peers, crude oil prices on Multi Commodity Exchange of India also crashed over 5 per cent on Friday. It traded at Rs 5,536 per barrel.
Apart from crude oil, guar gum contracts on the National Commodity Exchange of India too fell on Friday. Guar gum, a derivative of guar seed, is widely used in shale oil fracking industries across the globe. India’s Rajasthan state has a near monopoly in guar cultivation.
The demand for guar gum is typically proportional to that of the crude oil.
IANS / AGENCY