Nifty Recovered on Positive Global Cues and Hopes of No National Lockdown 2.0

  • Market Overview

India’s benchmark stock index Nifty 50 (NSEI) closed around 14406.15 Thursday; surged almost +0.77% on positive global cues, hopes of no national lockdown 2.0 (COVID), and progress of COVID vaccinations. On late Tuesday evening, Indian PM Modi stopped short of announcing the National Lockdown 2.0 in his address to the nation on the current COVID situation. Also, Pfizer’s initiative to supply its mRNA COVID vaccines to the Indian government boosted the sentiment Thursday's late trading hours. On the global front, cues were positive as Wall Street Futures recovered from a 2-days slump on ease of Russia-Ukraine tension and landmark progress of U.S. COVID vaccinations, as it touched 200M jabs.

On early Asian Wednesday, while the Indian stocks market was closed due to a holiday, SGX Nifty (IND50) plunged over -1% and made a low around 14016.75 after Indian PM Modi warned the nation about national lockdown 2.0 if terrible COVID situation in the country does not improve in the coming days.

India’s healthcare system is now almost broken. The country reported a record number of daily COVID cases Wednesday, setting a new global record with nearly 315K cases as the corona spread is now taking the shape of all-out community transmission. Although there is no official R-number in India, as per unofficial data, it’s now around 1.35 on an average in various states (1.10-1.62); jumped from 1.18 two weeks ago amid huge political rallies, religious festivals and the general public tend not to wear proper masks in public places for the last few months. Hospitals around the country are also swiftly running out of oxygen, medicines (Remdesivir) -a situation that’s complicated by malfunctioning equipment, exhausted healthcare system, and chaotic vaccinations.

India now facing a huge shortage of COVID vaccines and the general public is now forced to stand up in the vaccinations line from overnight for a hope to get vaccinated the next day-a a common chaotic scene almost everywhere. Although the Indian government is now trying to boost the production and import of various COVID vaccines in the country including Russian Sputnik (adenovirus) and Pfizer-BTT m-RNA COVID vaccines, it may be too little and too late. As of now, India can fully vaccinate only 1.3% of its huge population (almost 1400-1500M) in around 3.5-months (from mid-January to late April).

At this tepid vaccination pace, India will need 50-55 months; i.e. over 4-years to vaccinate around 20% of its population unless the country can significantly enhance supplies of COVID vaccines. Assuming almost 40% of Indian people may have already achieved natural herd immunity; India needs to vaccinate at least 20-40% of its population preliminary for workable herd immunity in the country and public/admin confidence.

Indian Federal government has the precious time of around 6-months in hand to arrange imported COVID vaccines along with the required fiscal stimulus/grants to boost domestic production many times, knowing full well the huge population/requirement of the same. It’s very tragic despite being the global manufacturing hub of vaccines; India is now in dire shortages of the same due to misguided government policy as the government didn’t take the risk of adequate funding to boost domestic COVID vaccine production (COVAC and COVID SHIELD) from early days even after the successful clinical trial.

Developed, rich countries like U.S., U.K. and even the EU risked their capital or a part of COVID fiscal stimulus (grants) at the very early stages of COVID vaccine development, irrespective of the success of the same. Although the Indian government claimed huge fiscal stimulus through various ‘Atma Nirbhar’ (self-sufficient) packages, Modi admin miserably failed/ignored the boosting of domestic COVID vaccine productions compared to the huge population/requirement.

On late Tuesday, Indian PMO announced that PM Modi will address the nation shortly. Soon after that SGX Nifty made a low around 14016.75, but recovered to some extent as Modi stopped short of an announcement of COVID National Lockdown 2.0 unlike last year (Lockdown 1.0). But Modi warned of Lockdown 2.0 in the coming days as a ‘last option’ if the situation does not improve. Modi also urged states to opt for the lockdown as a last resort to maintain a balance between lives & livelihoods (economy). Modi also requested the general public to avoid unnecessary roaming in public places.

A grim and less confident looking Modi said:

The government is working with speed and sensitivity to meet the increasing demand for oxygen. After 1st May, every person above 18 years can be vaccinated. Half of the vaccines produced in India will go directly to the states and hospitals. By opening vaccination for a population above 18 years, the vaccine will be available quickly for the workforce in the cities. Along with saving lives, the effort is to save the economic activities and ensure a minimum adverse impact on the livelihood of the people. State governments should boost the confidence of the labourers and convince them to stay wherever they are.

In today’s circumstances, we have to save the country from lockdown. State governments should treat lockdown only as a measure of the last resort. We have to concentrate on micro containment zones and have to try our best to avoid lockdown.
Our scientists came out with the vaccine in a very short time and today India has the cheapest vaccine in the world which is compatible with the cold chain available in India. Due to this team effort, India has embarked upon the world’s largest vaccination drive with two ‘made in India’ Vaccines. From the very first phase of the vaccination drive, it has been emphasized that the vaccine reaches the maximum areas and to the people who need it. India gave the first 10 crores, 11 crore, and 12 crore vaccine doses in the shortest time in the world--along with saving lives, the effort is to save the economic activities and ensure a minimum adverse impact on the livelihood of the people. We have much better knowledge and resources to meet the challenge than the initial days of the first wave.

I called upon the youth to help in maintaining COVID-appropriate behaviour in their areas and neighbourhood. This will help in avoiding containment zones, curfews, or lockdowns. I urged children to create an atmosphere where their family members avoid going out unnecessarily--- in today’s circumstances; we have to save the country from lockdown.

On Thursday, Nifty was boosted by media, banks & financials, metals, realty, infra, energy, and automobiles, while dragged by FMCG, MNC, Pharma and techs. Nifty was helped by HDFC Bank (NS: HDBK ), ICICI Bank (NS: ICBK ), HDFC (NS: HDFC ), Kotak Bank, SBI (NS: SBI ), Wipro (NS: WIPR ), Tata Steel (NS: TISC ), ITC (NS: ITC ), JSW Steel (NS: JSTL ), Bajaj Fin, RIL and Axis Bank (NS: AXBK ), while dragged by HUL, TCS (NS: TCS ), Asian Paint, Titan (NS: TITN ), Ultratech Cement (NS: ULTC ), M&M (NS: MAHM ), Nestle (NS: NEST ) and Tech-M.

Bottom line:

Under the current terrible and chaotic COVID situation, where India’s healthcare system is almost out of medical oxygen and people are tragically dying for this basic thing, there is no option left but to go for National Lockdown 2.0. Although many Indian states are now under partial/full lockdown, PM Modi may soon announce another nationwide lockdown to slow the spread and unprecedented pressure on the healthcare system. Modi may formally announce National Lockdown 2.0 exempting some critical sectors of the economy as much as possible to diminish the economic impact. As the last date of the WB state election is 29th April (still now scheduled; may be brought forward to 26th April), Modi may announce National Lockdown 2.0 on 27th April itself for 2-weeks initially.

In the bigger picture, India needs to accelerate its COVID vaccinations process so that it can vaccinate at least 20% of its population by 2022 and until at least 60-80% vaccinations, need to ensure strict COVID mitigation protocols in public places even without going for full lockdown.
INDIA
Technical View: Nifty and Bank Nifty Future (Updated)
Technically whatever may be the narrative, Nifty Future now has to sustain over 14550 and Bank Nifty Future 32400 levels for any rally; otherwise except some corrections as per below levels.
INDIA

INDIA

INDIA50 ( Nifty 50 Futures )
INDIA

Bank NIFTY Futures

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  • Mani Kandan @Mani Kandan
    nifty , bank nifty is recovery or manipulation...
    Like 1
    • gaurav nagpal @gaurav nagpal
      Manipulation by DII
      Like 0
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