Markets continued to rally as Nifty reclaimed its satisfying 10,000 marks. This optimism is a result of the relaxations received by most industries during lockdown 4.0. A lot of major companies are now working at their near-maximum capacity. The government has encouraged people to resume their work routines keeping in mind the social distancing norms. The arrival of an early monsoon, which has always played a role in buoyed investor sentiments, adds to this optimism
While the economy has begun to recover from the jabs of the coronavirus pandemic, the government is looking at a fresh new crisis along the coast of Maharashtra, the “Nisarga” cyclone. Thousands of people have been evacuated, trains delayed and flights cancelled. It is a big threat to the financial capital of the country, Mumbai, and any form of disruption will negatively reflect on the markets.
Rural roots to stabilize the ailing autos
Mahindra & Mahindra came out with an announcement mentioning they faced a produced 87,000 fewer vehicles and 30,000 fewer tractors in the first quarter of the financial year. The revenue and profitability will be affected in line with the volumes. Such is the magnitude of crisis faced by the auto industry.
But as the country opens up, auto-makers are beginning to see light at the end of the tunnel. The industry expects tractor demand to show good improvement due to several positive factors such as record Rabi production, higher government procurement, the announcement of higher MSPs and chances of a normal monsoon aiding a good Kharif crop.
The industry expects a quick recovery in rural demand while urban demand is not expected to turn bullish anytime soon. This has again underlined the significance of timely monsoon in India.
There has been rising positivity in the markets and it is expected to continue with the momentum as India reaches near-zero restrictions. The cause of concern still remains due to loss of sales in the past 2 months but industries like automobiles are upbeat about their prospects in rural India.
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