Indian stock market: How big is the Covid risk for equities? Experts answer

livemint.com:

here Experts attribute this volatility to profit booking amid rising Covid cases. They observe that the sudden spike in infections has instilled a cautious sentiment among investors, prompting them to reassess their positions and opt for profit-taking strategies amid this uncertain landscape. As Mint reported earlier, a new strain of Covid-19 has emerged in the country, raising fresh concerns.

Identified as a descendant of the Omicron variant of SARS-CoV-2, JN.1 is the result of a highly mutated strain from the BA.2.86 variant, nicknamed Pirola. The World Health Organization (WHO) currently considers JN.1 to be a ‘variant of interest’, adding that it presents a lower risk. Yet, many experts believe that we should be careful.

Read More: Covid is spiking again. Just how serious is it now? The Covid-19 pandemic caused widespread uncertainty and panic in financial markets worldwide in 2020. Stock markets across the globe suffered strong losses as concerns over the pandemic and its potential economic impact grew.

The rising cases now could instil some sense of caution but it is not alarming at this juncture. While the ongoing risk remains, the market's reaction will depend on how the situation unfolds from here on. Experts believe Covid is not a major trigger for the market at this juncture.

Moreover, they also highlight that the existing line of treatment is expected to be effective against the new variant. Additionally, the government's preparedness against the pandemic is now much better compared to the past. "Covid is not yet a major threat.