Revival Efforts To Rule The Roost

After the vaccination drive in the first half of 2021 and economic normalisation in the second half will be a key watch list. The steroids in terms of cheap and plentiful liquidity are likely to drive core economic activity which would increase the demand for commodities across sectors. 

Due to the combined efforts of global central banks, unprecedented liquidity infusion led to massive gains across global markets, US alone infused around $5trillion, higher than ever. India did its bit and announced a slew of monetary, fiscal, and regulatory measures to ensure the impact of the deadly disease was minimized and life and livelihood were protected.

The government's priority would be to get back job growth and bring down historically high unemployment. Governments across countries, led by the US, Europe, China, India, and others may allocate resources for infrastructure development. After a brief correction post a stellar rally in commodities, we may see demand and prices of industrial commodities led by steel, non-ferrous metals, and oil prices may increase, favoring returns from cyclical.

A massive change in management and businesses’ adaptability and use of artificial intelligence, robotics, automation, and digitisation will be prioritised across sectors, especially in healthcare, automobiles, manufacturing, agriculture, building, and construction. This will support growth across sectors. 

On the market front, mid and small companies in building and construction, agriculture, IT and healthcare, aggregates, metals, textiles, consumer durables, and engineering are outperforming the larger peers. The recent initiatives of the Government like Make in India, Reduction in Corporate tax rates, Aatmanirbhar Bharat, and the production-linked benefits may see manufacturing activities in the country increase, emphasising growth in these sectors. 

The author is a Market Strategist

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