Moneycontrol Pro Panorama: The shadow of COVID is not gone. Just yet

(Image: AP)

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.

In a sobering reminder that COVID-19 is still around, China has locked down Shenzhen — with a population of 17 million — to control the spread of infections. The number of cases that have led to this drastic decision seems ridiculously low, 66 new infections reported in the city on Sunday, but the country’s authorities are taking no chances.

China reported 1,800 new cases on Sunday, the most in two years since the pandemic began, said an FT report. Changchun, a city in North-East China, with a population of 9 million had been put under a lockdown earlier. Hong Kong too is facing a sharp spike in COVID-19 numbers. The Omicron variant is mainly behind the sharp increase in cases. Meanwhile, Europe is also seeing a small increase in cases, with the EU and the UK both seeing cases increase in March.

In India, the situation remains under control and as we reported in last week’s update to our Herd Immunity Tracker, nearly 82 percent of the adult population has been fully vaccinated. Hopefully, that should ensure we are able to tackle future waves, if any, without much disruption to economic activity.

China’s aggressive response to the spread was not surprising, but is nevertheless worrying investors. Apple’s main supplier Foxconn announced closure of its facility at Shenzhen due to the lockdowns. More lockdowns and closures by companies could again disrupt the global supply chain. Keep a watch on how this progresses. The broad market in Shanghai closed down by 2.6 percent while the Hang Seng was down by 4.6 percent. However, India’s stock market is faring better, with the Sensex up by 1.1 percent at 12.50 pm.

Leading the gains was HDFC Bank, with investors taking comfort from the RBI removing the last of restrictions on its digital initiatives, removing any hindrances that may have been on its growth path. Will this mean the bank can regain lost ground? Will this be a comeback year? Are there other worries investors should keep a watch over? For answers, read: With digital woes behind it, HDFC Bank now needs a friendlier world.

But, on a day when the broad market is up, the FMCG index is dragging its feet. The underperformance of the FMCG index has been on display for some time and would be bothering investors. Reasons such as soft rural demand and rising inflation making matters worse are the main reasons for its underperformance. What’s the outlook for the sector? Read here.

Investing insights from our research team

Key takeaways from LIC’s December earnings

Grauer & Weil: A high quality small-cap bet on economic revival

What else are we reading?

Andy Mukherjee | Can India really overthrow Visa and Mastercard?

Rupee-rouble trade — Easier said than done

The Eastern Window: What the Chinese premier’s stepping down means for India

Chart of the Day | Government spending on infrastructure is currently the economy’s lifeline

The ‘Delhi model’ of development that won Punjab for AAP

Pharma companies turn to acquisitions to build scale, gain an edge

A US recession is on the table (republished from the FT)

We’ll miss globalisation when it’s gone

And, in Personal Finance

Personal Finance: EPFO’s proposal to lower rates makes ETF investing more compellingTechnical Picks: Crude oil, Bank Nifty, Canara Bank, REC and SBI (These are published every trading day before markets open and can be read on the app)

Ravi Ananthanarayanan
Moneycontrol Pro