1) COVID cases are down from above 4 lakhs to below 1.50 lakhs, but June will be a testing month in terms of returning to normal activity, putting vaccinations on a war footing and preventing COVID 3.0. This could be the biggest test for markets in Jun-21.
2) With over 1200 major companies declaring results, net profit is up 19.5% sequentially. That was much better than expected. The results will be completed on Jun-21. If that pace of growth can be maintained, markets should be flattered.
3) The second monetary policy of FY22 on 04 June will be watched more for cues on borrowings and GSAPs. Markets would be worried if the fiscal deficit shoots too much beyond 6.8%. Government has already agreed to borrow another Rs.158,000 crore.
4) Growth impulses need to be tracked. GDP grew 1.6% in Q4 and contracted -7.3% in FY21. Most monthly growth figures are driven by base effect. The big story is how the IIP, core sector and PMI pan out sequentially. Inflation also needs to be watched.
5) With crude oil near $70/bbl, the OPEC meet in Jun-21 on supply cuts assumes significance. With petrol crossing Rs.100/litre in most cities, India needs lower crude prices urgently to manage the balance of trade and also to rein in inflation.