● Geo Politics:
Global supply chain distruptions and escalating Russia-Ukraine conflict have led
to signficant increase in International crude oil and other commodity prices. Higher energy and
commodity prices can not only lead to cut in earnings expectations of corporates from lower
margins but it can also have a serious effect on consumer spending.
India’s ruling party has claimed victory in four key state elections including the country’s
most populous state, UP winning 255 seats of 403 legislative seats. This is positive sign for ruiling
party in the upcoming 2024 general elections.
● Quarterly earnings:
With earnings season around the corner, management commentary would
be key to watch for. Rising inflation across spectrum is expected to have margin pressure on
manufacturing companies; while service industries is likely to face employee cost pressure due to
higher attrition. Margin pressure should be temporary and companies would be able to pass on the
cost prices to their consumers with some lag.
Surge in energy and commodity prices leads to cheers for some and negative for other
ecomonies. India being at disadvantage position due to net import of these. Higher possibility of
break of current account deficit could depreciate rupee.
Cases/Vaccinations: Covid cases has come down signficantly in last two months after a
spike of cases in the month of January. States have relaxted some of the Covid related restrictions.
Vaccination continues at good pace with more than 2/3rd of Indian population is partially vaccinated
and more than half of the total population is fully vaccinated.