Market Musings Week 15: 2nd Phase of Covid

During the week, Nifty50 dragged to a new monthly low and the trend of the market got narrower with a negative bias in the last 2 months. Nifty was flat, down by 1%. The US markets reached all time highs.

In India, the daily COVID-19 cases have crossed 2.3+ lakhs — more than double of what they were during the peak of the first wave. These numbers may continue to rise in the coming weeks and may reduce over a period of time. We can expect this phase of stringent lockdowns to prevail for a period of 2-3 months, taking cues from similar cycles in developed countries like the United Kingdom and the United States. The economic growth will be impacted for a quarter.

How will this impact the market?

The period of impact may be lower at around one to two months, in anticipation of the new normal. The market has been factoring this slowdown over the last two months, slowly consolidating. Governments know how to respond and there is the ongoing vaccination drive. There is no expectation of a countrywide lockdown either. With fiscal stimulus in place, the RBI has also stated that the monetary policy will be accommodative and support growth.

Yes, it is unnerving to see many loved ones get infected in this second phase but we will overcome this. Get vaccinated and wear a mask when outdoors!! Together we will prevail!

With the IPL season underway, lets look at the brand value of Franchises.

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