Moneycontrol Pro Panorama | Goldilocks is here, but will the bears return?

Investors have just been treated to some good GDP releases for the fourth quarter and upbeat projections from the RBI.

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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. 

It’s a challenge we would much rather not face, but that’s not to be. The El Nino effect is officially here, according to the US National Oceanic and Atmospheric Administration. The warming of ocean temperatures over the Pacific is meeting the criterion, with all weekly Nino indices higher than 0.5 degrees centigrade. Writing in today’s edition, Manas Chakravarty explains the El Nino phenomenon’s origins and then traces the impact it could have on the Indian economy in FY24.

Investors have just been treated to some good GDP releases for the fourth quarter and upbeat projections from the RBI and instead of the warm fuzzy feeling that comes with rising growth and falling inflation, will there be a chill of fear induced by El Nino? Fear not, says Chakravarty, who looks at the data to show that there isn’t a very strong correlation between the El Nino effect and monsoon rainfall over India.

The previous time we had a severe El Nino effect was in 2015-16 and how agricultural output behaved in that year should give investors some idea of what’s there to fear. Given that elections are due next year, the government will be keeping an eagle eye on inflation. That should be good news for investors, too. But we still need to prepare ourselves to meet this challenge, both the government and investors alike. Do read our piece to know more.

Rainfall, agriculture and inflation will be on the consumer industry’s minds too, more particularly rural-sensitive sectors such as FMCG and two-wheelers. They have been waiting a long while for rural demand to pick up pace. While two-wheeler sales have shown some spirit, the FMCG industry is hopeful that the green shoots they spotted towards the end of the March quarter mature into sturdy saplings in FY24.

FMCG bellwether Hindustan Unilever will be soon helmed by a new MD and CEO, Rohit Jawa, in FY24. The outgoing chief Sanjiv Mehta believes that competition and inflation are the main challenges that FMCG companies face. Which of these is a bigger worry? Could Jawa actually have a problem of plenty? We answer these and more questions in this in-depth piece on HUL. Do read.

It’s not just India where the worry lines may be spreading. Jerome Powell, the US Federal Reserve chair, will be readying his speech for this week to announce the FOMC’s decision on interest rates and share his thinking on the way forward. Today’s Financial Times selection (free to read for subscribers) talks about how the 5 percentage point increase in US interest rates has led to fears among Fed officials of whether the economy “buckles enough to tip into a recession”. It makes a case for how cracks in the economy could offset some of the data that signal an economy in good health. But on the other hand, says a Bank of England former official, “If you hike too much today and growth slows too much, you can quickly lower rates. That’s an easier problem to fix.” Do read.

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Technical Picks: Raymond, REC, USD-INR, SBI Cards, UPL and Guar seed (These are published every trading day before markets open and can be read on the app).

Ravi AnanthanarayananMoneycontrol Pro