Worst of Covid-19 crisis seems to be behind for developed economies –– Rapid spread of Covid –19 globally had led to Governments resorting to unprecedented measures including nationwide shutdowns across the world including Europe, while the US issued strict social distancing guidelines. The global lockdowns have clearly slowed the spread of the Covid – 19 especially in countries which had been impacted early on. New additions in Europe have slowed down significantly and they have already opened up significant parts of their economy. While the US has been the worst affected country with almost 2mn confirmed cases, the peak of the crisis seems to be behind them and all states have begun reopening their economy.

Increase in new Covid – 19 cases is key risk for Indian equities going forward – There has been a mass movement of migrant workers from urban to rural areas over the past few weeks which is leading to an increase in new cases. Though India has managed to contain the virus so far by enforcing one of the strictest lockdowns globally, there is a possibility of a jump in new cases down the line given increased movement of people. In that case the economic recovery may get pushed back as the Government could be forced to roll back some of the relaxations. This may result in increased market volatility down the line especially in cyclical sectors which are leading the current leg of the rally.

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