From Nykaa to Cipla to 3i infotech — these are some of the themes the market is betting on amid a sell-off

• Indian benchmark index Sensex drops over 1,450 points as reports of a new COVID variant spooks investors.
• Most of the sector stocks including banks, automobile, FMCG, metals have fallen today on concerns over another lockdown if the new COVID variant wreaks havoc.
• While the market trend is negative, investors are betting on companies that made money in the recent COVID crisis like pharma companies, diagnostic lab chains, technology service providers and so on.

Media reports of multiple cases of the new COVID variant — B.1.1.529 — reported in countries including South Africa and Hong Kong have impacted market sentiment across the globe as it raised concerns over another wave of the pandemic.

“One reason for the fall in market is a new variant of COVID-19, which threatens to create a negative sentiment with some countries tightening curbs. Net selling by FIIs [foreign institutional investors], stretched valuation of markets, downgrades by brokerages and concern over the liquidity tapering by the US federal reserve as well as the benchmark yields falling by 6 basis points are some other reasons for the fall,” said Manoj Dalmia, founder and director at Proficient Equities to Business Insider.

While these concerns persist, investors have spotted companies that might still make money in the crisis because of their business model.

It may not come as a surprise that pharmaceutical company stocks are trending today on hopes that another wave of COVID-19 may attract additional revenues to the companies selling drugs related to the virus.

Pharma stocks	% stock change
Solara Active Pharma	+10%
Cipla	+7%
AstraZeneca Pharma India	+6%
Pfizer	+5%
Alkem Laboratories	+7%
IOL Chemicals and Pharma	+3%
Dr Reddy's Laboratories	+3.5%
Cadila Healthcare	+2.47%
Poly Medicure	+2.60%
Strides Pharma Science	+2.66%
Aurobindo Pharma	+2%
Glenmark Pharmaceuticals	+2%

Another sector that is bucking the weak trend in the market are diagnostic companies, which made a significant amount of profits in the first two COVID-19 waves.

Diagnostic lab chains	% stock change
Dr Lal PathLabs	+7%
Medinova Diagnostic Services	+3.50%
Thyrocare Technologies	+0.70%
Metropolis Healthcare	+3.60%

Technology solutions providing companies were another theme working out in the market as demand for digital transformation may deepen if another lockdown kicks in.

Technology solution provider/IT service management firm	% stock change
Palred Technologies	+20%
R Systems	+12%
Trejhara	+10%
3i Infotech	+5%
Goldstone Technologies	+5%

The Tata Group telecom services company Tata Teleservices (Maharashtra), which is a leading enabler of digital connectivity and cloud solutions to enterprises, also rallied. The stock has already surged 1,200% in 2021.

Broadband and telecommunication firm	% stock change
Tata Teleservices	+5%

Some of the recently listed initial public offerings (IPOs) were also bucking the market trend. For Nykaa, the fact that it is a tech-enabled firm being an advantage, Latent View Analytics on future demand for data analytics among industries. Tarsons Products, which listed on exchanges on Friday, is an Indian labware company that rallied more on hopes of increase in laboratory investigations with another wave of COVID-19.

Recent IPO stocks	% stock change
Nykaa	+4.7%
Paras Defense & Space Technologies	+4%
Tarsons Products	+26%
Latent View Analytics	+1%

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