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Nilesh Shah | Third Covid Wave: Is the market pricing in the possibility of a third Covid wave?

Let me just throw some headlines at you. The headline one is demand disruption because of medical news, crude at $70 and companies are indicating that there is going to be a pull down in demand because of what is happening on ground. If the headlines are not favourable, why are markets holding on? The headlines may not be our favourites but a couple of things are happening. There is a surge in global prices of several commodities and India is a producer of some of these commodities which is going to lead to inflation. But inflation in a way is positive or earnings accretive for several of the businesses in India. Crude is at $70 and some of the other commodities obviously are at multi-year highs, but that is inflation and therefore that will lead to earnings growth. That in turn will unleash the animal spirits of producers and they are going to go on a capex spree. They are going to increase capacity and we are going to see heightened economic activity. It sounds counterintuitive, b

sensex: Dalal Street indices fall 1% on Asian cues

Synopsis Foreign portfolio investors (FPIs) have been selling Indian stocks of late amid the broader risk aversion to emerging market stocks on fears that expectations of rising rates in the US could led to the dollar strengthening. On Wednesday, FPIs sold Indian shares worth Rs 1,260.6 crore, taking their total sales tally for May so far to Rs 4,400 crore. Moody s Investor Service said Tuesday that the second wave of Covid would slow India’s near-term economic recovery. It has slashed India s real GDP growth forecast to 9.3 per cent from 13.7 per cent for FY22. Mumbai: Indian stocks dropped 1 per cent on Wednesday, mirroring the weakness in Asian markets, over worries that a jump in inflation in the US could lead to interest rate hikes there. The unabated surge in Covid-19 cases across the country added to the jitters as lockdowns in various states have disrupted business, triggering a spate of downgrades in growth estimates.

Sugar stocks: Sugar stocks no more le phataphat, de phataphat bets Here s why

Explore Now NEW DELHI: When does a commodity stock start rallying? The typical answer is when the price of the underlying commodity starts inching upwards. Well, stocks of sugar mills might soon turn out to be an exception to this market basics, as the segment is gradually shifting away from being a cyclical to a structural play, all thanks to the government’s push for ethanol-blended petrol in India. For many sugar-producing factories, ethanol was so far just a byproduct for generating additional revenue. The equation now seems to be reversing in many plants. “About 85 per cent of revenues of the sugar companies come from the sugar segment and the remaining 15 per cent from ethanol. As the blending mix goes up, the revenue contribution of ethanol to the company s sales will improve to nearly 30 per cent. Ethanol is a higher ROC (return on capital) business,” says Pankaj Pandey, Research of Head at ICICIdirect.

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