Strict lockdowns likely if Covid nos. rise: JP Morgan | Economic Times

Mumbai: Indian authorities may be forced to impose lockdowns if the number of coronavirus cases continues to rise sharply, said JP Morgan.India is currently seeing a record daily surge in coronavirus cases amid the second wave of the pandemic that has plagued the world for over a year now.“The authorities have imposed some local restrictions to contain the proliferation of Covid-19, but they seem to be reluctant to impose hard lockdowns due to the economic costs,” said JP Morgan in a note. “However, if cases continue to rise sharply and medical infrastructure gets overwhelmed then the authorities may be forced to impose stringent lockdowns,” said the note.India's benchmark indices are down nearly 6 per cent from all-time high levels hit in mid-February. Rise in the US dollar, US 10-year treasury yields and a surge in coronavirus cases have been the key factors behind this fall.JP Morgan said the spike in new cases so far has been concentrated in a few states, particularly Maharashtra which accounts for 60 per cent of the daily new cases. “...the impact of second wave on economic activity remains localised for now. However, we remain concerned about further sectoral divergence in economic momentum, with contact-based services likely to suffer more due to the second Covid wave,” said JP Morgan.The brokerage said the new cases have also increased in several other states though from a low base. The firm noted that till now there does not appear to be a material impact on national mobility and activity. A ramping up of vaccination drive could effectively break the link between mobility/activity and the proliferation of Covid-19 cases, said JP Morgan.