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.
Today is the day of the summer solstice, the longest day of the summer season. It may also seem like that for traders as the broad market is not doing much, trading virtually unchanged at 1.10pm. There are a few defensives in the green, a bunch of financials sporting a brave face and the rest sporting a loss. That’s still not a bad showing compared to Asian equity markets, which have lost ground. Even domestic equities are feeling the heat somewhat, with the Sensex trading virtually flat.
Investors are right in taking their time to absorb the implications of the changed situation. In our chart of the day, we point out real US yields rising ahead of the taper may see emerging FX get hit and in turn pose a risk to equities. These scenarios will keep evolving as investors globally will try to look at what lies ahead. For instance, today’s FT selection (free to read for Pro subscribers) talks about how the markets are not really prepared for a situation where the US corporate recovery may not be very impressive and why some investors are worried about it. Do read.
While the Fed has signalled a shift, India’s central bank is still grappling with the need to support growth even as inflation is a growing threat. In If demand has been hit, as MPC says, how can companies pass on higher costs?, we point out an inconsistency in the Monetary Policy Committee’s view on the growth-inflation debate. If the need to support growth is because demand has been hit and therefore is not absorbing supply, then prices should be declining. But there are supply side pressures on costs that are not controlled by firms — energy, metals and edible oils, for example. Even then, producers should find it difficult to pass on these prices, but they are not. Where will this debate lead to and in the final analysis, what does it mean for the central bank, companies and investors? Read to know.
Now, June 21 is also the day when the central government’s new version of the phase 3 of vaccination will begin. It will now procure 75 percent of doses that will be given for free to all adults and the remaining 25 percent will be available for the private sector to take. The vaccination trend so far in June marks an increase in the number of per day vaccinations. Hopefully, with states not having to procure individually, the daily vaccination average will improve further. As we said in our Herd Immunity Tracker, it has edged up to 3.4 million a day, but is still short of the 4 million target.
And, yes, it’s also the International Yoga Day today. While the markets have struck a sleeping pose, you can choose to be more energetic and choose from the myriad yoga poses to make your day brighter and healthier.
Here are investing insights from our research team:
Indostar Capital Finance – Past imperfect, present tense but future promising
Is this the time to include tyre stocks in your core portfolio?
GAIL: Long-term bet on India’s natural gas demand
EaseMyTrip – An outlier in a distressed industry
What else are we reading today?
PMC Bank crisis | Time to bring back FRDI Bill
Monsoon Watch 2021: Healthy rainfall trend to continue
Shipping delay muddies the waters for world trade
The impact of automation on India's IT jobs
How meme lords fuelled a boom in the ‘stonk market’ (republished from the FT) GuruSpeak | Gautam Mazumdar’s lessons in risk from coal mining help him trade successfully but in a disciplined manner
Mutual fund stocks: What’s good for mutual fund unitholders needn’t be good for the shareholders
Technical picks: Colgate Palmolive, Bank Nifty, PEL and BEML (These are published every trading day before the markets open and can be read on the app)
Ravi Ananthanarayanan
Moneycontrol Pro
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