Moneycontrol Pro Panorama | Investors look at the brighter side

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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 stock market began its first trading day on a bright note, ignoring the mild bells of alarm that are ringing. The Omicron variant appears to be driving up cases in metros such as Delhi and Mumbai, where COVID-19’s earlier waves also saw cases accelerate early on. Some curbs on activity are being put, with Maharashtra announcing a ban on visiting public places such as parks and beaches between 5pm and 5am. Other states also have curbs in place for some time now and whether they will tighten these remains to be seen.

But these curbs are not affecting businesses, indicating that the government is mindful of not hurting economic activity. Even so businesses seem to be going slower on the output front, whether it is due to Omicron-driven fears or demand trends. India’s manufacturing PMI for December came in at a 3-month low of 55.5, but still above the 50 mark denoting an expansion in activity. Business sentiment was affected by concerns related to COVID-19, supply chain disruption and inflation.

The Sensex is up by 1 percent and a look at the sectoral indices shows old economy sectors such as energy, capital goods, financials, industrials and automobiles gaining. Sectors that were seen as relative outperformers during a lockdown or a pandemic situation, such as fast moving consumer goods and healthcare, are snoozing in comparison. The markets could be proved wrong later, but for now they are discounting fears that the spread of Omicron is going to result in lockdowns that affect economic activity.

They may have a point. Already, some of the positive linkages that industries profit from are becoming visible. Vatsala Kamat writes today on how truck rentals have been rising in the past few months, which brightens the outlook for fleet operators for sure, but improving profits should result in higher demand for commercial vehicles as well. This is just one of the tailwinds that are lining up to propel demand for CVs. Do read her analysis to know what the others are and also, what could trip up the sector.

Our research team’s Jitendra Gupta picks up a power stock NTPC that’s corrected recently, but positive factors such as core business growth, contribution from its renewable energy business and plans to hive it off make it worth another look. Do read to know more.

One more investing insight from our research team

Indiamart Intermesh: Huge opportunity for growth as online rush builds

What else are we reading today?

PMI: Manufacturing growth lost momentum in December, but inflation too falls

The Eastern Window | China’s economic slowdown is a deliberate move to meet political goals

Start-up Street: The future holds a tsunami of innovations in digital banking

Bond yields across the curve will drift upwards in 2022

Open Network for Digital Commerce: A challenge to the likes of Amazon?

As the ETF world booms, so do the risks (republished from the FT)

The emerging world in 2022: threats and possibilities

India’s multibillion dollar semiconductor push needs military backing

Technical picks: Narayana Hrudalaya, Hatsun Agro, Century Textiles and ICICI Bank (These are published every trading day before markets open)

Ravi Ananthanarayanan

Moneycontrol Pro

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