Financial circumstances worsened in Mar 2021, tightening to their worst stage because the onset of the pandemic. ICICI Securities’ monetary situation Index -FCI- rating fell to eight.5 in March, down from 9.6 in February and eight.8 in March 2020.
From March 2020 to February 2021, FCI averaged 9.3, reaching its greatest rating throughout the months of October-December 2020. Out of the 5 FCI parts, tighter circumstances in three parts viz. debt market, foreign exchange market and mixture demand market circumstances dragged down total FCI whereas simpler circumstances in inventory and cash market offered average help.
The Nomura India Business Resumption Index (NIBRI) dropped sharply to 90.7 for the week ending 4 April 04, from 94.6 the prior week, 9.3percentage factors under the pre-pandemic regular. This is its steepest weekly decline since mid-April final 12 months. ” The second wave is hurting the pace of activity” stated Nomura’s analysis “but we view the medium-term impact as limited”
The fall in Nomura’s indicators was pushed by a pointy deterioration in mobility information. Google’s office and retail & recreation mobility indices fell by 9.7percentage factors and 4.0 proportion factors, respectively, from the prior week, whereas the Apple driving index fell by 4.7percentage factors. “This reflects both local restrictions and possibly more cautious consumer behaviour amid the second wave” Nomura stated.
Unlike the sharp falls in mobility information, the affect on actual exercise seems much less extreme. Power demand fell by only one.1% w-o-w (sa) after a 0.8% drop the prior week, whereas the labour participation charge remained largely secure at 41.2%. Overall, NIBRI suggests the second wave is hurting the tempo of exercise.
Although the rupee remained broadly unchanged at 72.8/greenback throughout Mar and Feb 2021, a pointy surge in ahead premia on the brief finish led to ICICI Securities’ foreign exchange market rating falling to 0.78 in Mar 2021 from 1.2 in Feb. 1-month ahead premia surged to six.14 in March 2021 from 4.47 in Feb. However, ahead premia on 3-month and 6-month tenors softened by 3-16 bps (one bps 0.01 per cent). “The reason behind the sharp uptick in 1-month forward premia could be banks converting dollars to rupees before the financial year-end” ICICI Securities stated.