MUMBAI: Christopher Wood, global head of equity strategy at brokerage Jefferies, said concerns over a second wave of coronavirus are premature and the rally in equity markets can continue.“It is clear that markets are more focused on the reopening narrative than the second wave concerns... the biggest risk to stocks, particularly growth stocks, will come next quarter when investors will be talking V-shaped recovery and there will be a sudden realisation that monetary policy is too easy,” said Wood in his weekly note titled “Greed & Fear”.Wood suggests that equity investors should maintain a barbell strategy of owning both growth and value stocks.“Growth stocks have resumed the relative outperformance of late, as discussed here last week, because of the renewed second wave concerns... But when the V-shaped recovery talk hits the market, and the pressure comes on pivot, it will be the cyclical stocks that (will) outperform again, such as financials, autos, energy and basic materials,” said Wood.Hong Kong-based Wood said there is unlikely to be a stringent lockdown in most parts of the world, especially in the United States and Europe, in case of a second wave of the coronavirus pandemic. There is no way the US under Donald Trump is going to close the economy again, partly because of the country’s presidential election late this year, said Wood.In Europe, the base case is that renewed outbreaks will be dealt with at the local district level, not by across-the-board closures, said Wood.Wood said that the US Presidential election campaign will start to impact markets in the coming quarter, most particularly given what has been going on in American cities of late.
Government's cash surplus tops Rs 3.4 lakh crore https://ift.tt/54P3HSG from the deceleration in government spending, higher direct tax collections and a likely sharp rise in issuances of Treasury Bills by the Centre in FY24 were factors pushing up the government's cash balances, analysts said. The flow of government cash balances to and from the banking system is a key factor that influences liquidity conditions.
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