Omicron Storm Begins in India 🌪

Wave 3 of this pandemic has officially begun in India. Cases are rising exponentially with last week data showing an avg daily cases of 6k to 37k yesterday.

Would to hear your views on what next 1-2 months are going to be? with lots of states comtemplating lockdowns, curfews and other resttrictions. will this create a dent in our economy’s growth trajectory? If yes, what is going to be the impact on our markets? There are ofcourse contrasting views regarding that this strain is mild compared to the previous one and this marks the end of the pandemic (where we now make a transition to endemic stage)

With budget and omicron surge, one things for sure - markets are going to be highly volatile.

What needs to be seen is will the history repeat (Market climbing the walls of worry by going up or will we see a deeper correction?

We as a nation cannot afford another lockdown. Lot of people are going to suffer if it comes to that. While I wish against it, I don’t rule out a drastic lockdown measure from the govt.

South is where market is going to dive, if that happens.

Although the news is negative around all ; the market is going up everyday !
how ?

Not necessarily true that the markets will dive. Remember, back in the second wave which was very brutal market was still hitting highs. The market can remain irrational for a very long time and nobody can predict it.

All valid points @Prakashsingh. One thing that has been clearly established is that markets and economy may not necessarily align in their trajectory.

On the question of whether lockdowns cause a negative impact on the economic growth, i believe the answer would be a resounding yes even without the data in hand.

It is easy to assume that markets will remain volatile, but we all know that volatility is entirely dependent on liquidity. So, let’s factor that into the thesis. Budget season always gets volatile as it rightfully should; nothing new there.

The real question here is whether governments can allow markets to remain bearish for a long period of time even if it comes at the cost of some very questionable monetary policies.

I believe one should retain focus on the market forces at play (flow). Everything else is, so to speak, “transitory”.

Why banknifty is on fire … given the world market under pressure?

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Markets and economy rarely move in same direction. There’s always a lag effect.

True @joyesh . FIIs are back and they may look to buy now till budget. Thats one possibility which is very likely.

With Budget and LIC IPO coming up soon, I doubt if mrkts can b bearish for too long.

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