● Geo Politics: Escalating Russia-Ukraine conflict is distrupting the global supply chain and has led to significant increase in crude oil and other commodity prices. Higher energy and commodity prices can not only lead to cut in earnings expectations of corporates due to lower margins but can also have a serious effect on consumer spending.

● Commodity inflation: Prices of major commodities have risen significantly over last couple of quarters. Higher commodity prices are likely to impact import dependent countries like India, the impact of which has already started showing in margins of manufacturing companies. Margin pressure should be temporary and companies would be able to pass on the cost prices to their consumers with some lag.

● Quarterly earnings: Management commentary would be key to watch in current earning season. Companies which have reported results so far have shown mixed bag performance. Some companies have shown higher revenue on the back of higher commodity prices. While others are reporting lower margins on the back of inflation.

● Power shortage: India is facing its worst electricity shortage as high tempreature forces early closure of school and send people indoors. Coal prices on the other hand have risen significantly leading to higher energy cost for manufacturing companies.

● GST collection: GST collections touched an all-time high of over ₹1.68 lakh crore in April on the back of improving economic activities. This comes after the second highest collection of ₹1.42 lakh crore that was reported in the month of March 2022.

● Rupee: Surge in energy and commodity prices leads to cheers for some and negative for other ecomonies. India is at a disadvantaged position due to being a net importer of these commodities. Higher possibility of widening of current account deficit and depreciation of the rupee.

● Covid: Cases/Vaccinations: Covid cases have begun to increase from last few days. However, COVID related restrictions have continued to be relaxed and economic activities are reverting back to normal. Vaccination continues at good pace with more than 2/3rd of Indian population partially vaccinated and more than half of the total population is fully vaccinated. DCGI has granted emergency use COVID-19 vaccines for children under the age of 12.