Moneycontrol Pro Panorama | What can keep the recovery on course?


Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

The second wave has come and gone. A third wave may be getting ready, but let’s hope it’s milder and for now, enjoy the relative calm visible in the economic data. It’s also a period when the post-lockdown bounce — due to pent-up demand finding outlets — may be at risk of petering out. Will underlying demand be strong enough to keep the economic indicators flashing green is a question for which answers should come up in the coming months.

The Nomura India Business Resumption index dropped after reaching a record high in the preceding week. Underlying high frequency data points are showing mixed trends. Our Economic Recovery Tracker too has been pointing to volatile trends, do read the latest update to the tracker published today. The latest edition points to a moderation in electricity usage and retail vehicle sales. On the brighter side, unemployment moderated a bit even as people are stepping out more to buy essentials.

Elsewhere in the world, an increase in COVID-19 cases is delaying office reopening dates and also clouding the recovery that was taking place in business travel. Singapore is asking its residents to limit social gatherings. Saudi Arabia has cut crude oil sale price for its Asia customers, reflecting demand uncertainty. But the oil price cut by Saudi Arabia may well be aimed at market share gains, we write in today’s edition. A slowdown in China’s economy and diversification of oil sources by India may be behind this move.

Investors will be keeping a close watch over whether the positive momentum seen in domestic demand can be sustained. One way of doing it is to do everything possible to push back against a harsh third wave. For this, the Centre and states should come together to adopt an agenda of imposing COVID-19 appropriate behaviour through their ground level workers, argues Subir Roy in this piece. Concurrently, the governments can give a sustained push to vaccination. This can not only reduce the risk and severity of the third wave but also help the economy maintain its recovery. The fact that we have crossed the 1-crore mark in vaccinations for the third time in 11 days is great news. Now we just need to make that a daily affair.

Investing insights from our research team:

What to do with Coforge after the stellar run?

SIS: Stable India business, growth in facility management to drive earnings

KEI Industries: Riding piggyback on retail demand

Clean Science and Technology: Growth with sustainability

What else are we reading today?

Consumers win in the account aggregator system, but what about banks and fintechs?

App stores now in government crosshairs

What explains the surprise rally in Indian bonds?

China and Big Tech: Xi’s blueprint for a digital dictatorship (Republished from the FT)

Picks from our technical analysts: Escorts, IRCTC, Tata Chemicals and Laurus Lab (These are published every trading day before markets open and can be read on the app)

R Sree RamMoneycontrol Pro