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Moneycontrol Pro Panorama | It's time to get a grip on the second wave

In today’s edition of Moneycontrol Pro Panorama: COVID cloud over rural economy, Hero MotoCorp in the driver’s seat, the cracks in healthcare, Bandhan tied up in knots, passive assets on fire and more

May 10, 2021 / 03:05 PM IST
Things could change in the coming months as the government last month gave an advance to Serum Institute of India and Bharat Biotech, which could help boost manufacturing. And last week, India received its first batch of Sputnik V vaccines. Russia has signed a deal with an Indian pharmaceutical company to distribute 125 million doses. (Image: AP)

Things could change in the coming months as the government last month gave an advance to Serum Institute of India and Bharat Biotech, which could help boost manufacturing. And last week, India received its first batch of Sputnik V vaccines. Russia has signed a deal with an Indian pharmaceutical company to distribute 125 million doses. (Image: AP)


Dear Reader,

The stock market will have risen for four consecutive days if today’s 370 point gain in the Sensex (at 12.58pm) holds when trading ends. This is even as a ring of lockdowns is being imposed across the country, either new or extensions of existing ones, to arrest the spread of the virus. The market’s apparent indifference to the likely economic havoc caused by these lockdowns and the hardships suffered by families is puzzling some observers.

After all, the second wave is halting activities in several states and is expected to have a severe effect on economic growth in the second quarter. Worse, it’s spreading rapidly in rural areas that have always suffered from weak healthcare systems which makes them more vulnerable to the disease. The risk of a hit to the rural economy is one of the concerns we have highlighted in today’s edition. This is not just about the risk to rural demand, which was a major source of strength for companies in the first wave, but also to the workforce that runs factories that are situated near rural areas. For instance, Hero MotoCorp said its plant, which has been shut since May 1 is extending the shutdown by another week. But the stock continues to be an attractive one for investors, says our research team, in today’s edition: Hero MotoCorp: A fundamentally strong business available at reasonable valuation.

There has been a deceleration in cases in cities such as Mumbai that were adversely affected initially, which may be giving hope that the worst will be soon be behind us for other places too. There may also be hope that because industries and essential goods and activities are being allowed to function, the hit to companies may be less. Most of this optimism centres around hope that there is no long lasting demand destruction because of the second wave.

There is room for some caution, however. States are still struggling to cope with the rising demand on the healthcare infrastructure. The Supreme Court had to step in to set up a national task force for the allocation of oxygen. There is also the mammoth task of vaccinating as much of the population as possible before the next wave hits. Even those familiar with technology and having access are struggling to book appointments. Then there are those who have got the first dose but are not finding availability for the second dose. Improved availability of the two existing vaccines and the addition of more vaccines should bring some much needed relief in the coming months, if the government gets its act together.

Close
In today’s edition, these stories give you a better perspective on what ails India’s fight against COVID-19 and what needs to be done to stamp out the second wave and prevent another one from engulfing the country.

Apart from this, we also have more investing insights from our independent research team:

The worst may not yet be over for Bandhan Bank even after weak Q4 show

Avenue Supermarts: Good result, but when should one buy the stock?

Dabur India: Why it deserves a look despite premium valuation

Praj Industries: Two-fold jump in orders fuels strong growth

Technical picks:

Bharti AirtelUPLAsian Paints and Poly Medicure (These are published every trading day before markets open and can be read on the app)

What else are we reading today?

GuruSpeak | Ankush Bajaj: An algo trader on how he trades multiple strategies for steady returns

Global passive assets hit $15 trillion as ETF boom heats up (republished from the FT)

Secrets about mutual fund investing which experts do not tell you

Ravi AnanthanarayananMoneycontrol Pro
Ravi Ananthanarayanan
first published: May 10, 2021 03:04 pm

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