Week ahead: Covid-19 news, Australian Open

covid update

India on Sunday marked one year of its massive vaccination campaign against COVID-19. However, it is vulnerable to a strong third wave of infections induced by the Omicron variant. The country now has more than 1.5 million active cases, the highest since the start of June 2021, and about 13% of samples being tested for the virus are turning out to be positive.

But good signs are emerging. There are early indications that the wave may peak in Mumbai and plateau in Delhi. Projection models show that the coming two weeks could peak nationally, even as infections begin to rise in some rural parts.

However, some states like West Bengal, Delhi, Maharashtra and poll-bound Goa still have positivity rates above 20%. Daily new cases are inching towards 300,000, and may exceed the last peak hit in May this week before descending again.

bajaj auto earnings

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The domestic automobile industry was the biggest hit by the global chip shortage in the December quarter. Business was also affected by weak festive sales. A sharp jump in commodity prices may also impact operating margins.

Two-wheeler company Bajaj Auto, which announced its quarterly results on Wednesday, may also get a setback. The company has registered a quarter-on-quarter growth in sales volume with the share of three wheelers improving overall. It has raised prices and cut costs. Reliance Securities report expects a good bottom line despite higher commodity costs, due to better exports at a favorable exchange rate and lower tax rates.

Still, analysts expect margins to decline by about 200 basis points sequentially due to continuing raw material supply issues. With the onset of the third wave of the pandemic and supply constraints, the sector is facing near-term challenges.

icici bank earnings

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ICICI Bank will announce its December quarter results on Saturday. Most large lenders are expected to perform better during the quarter, buoyed by improved asset quality trends. For ICICI Bank, both net interest margin and credit growth may remain stable with steady contribution from small business and retail borrowers.

Analysts at Kotak Institutional Equities forecast a decline of around 2%, but expect asset quality tensions to remain subdued on the back of improving business performance.

The bank is better positioned than its peers on pre-provision operating profit growth, which is also pushing up its stock prices. Shares of ICICI Bank rose nearly 6% in the December quarter, compared with a 5.4% decline in sectoral benchmark BSE Bankex.

However, investors will keep an eye on business risks arising from the third wave of the pandemic.

China GDP

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China’s economy underperformed in the first half of 2021, driven by a low-base effect and strong exports. But the economy then began to slow down, engulfed in an asset crisis and the Evergrande Group was marred by financial troubles. Disruptions in industrial production and supply also acted as headwinds, as did the country’s strict zero-Covid strategy. As such, GDP growth could dip from 4.9 per cent in the December quarter to slightly above 3%, several analysts said. Data is on Monday.

Despite the slowdown, full-year growth could still be above 8%. The real concern is for 2022 as the unresolved power and asset crises could drag growth further down to around 5%. It may take time for the People’s Bank of China to cut interest rates in December. Tough measures to contain the pandemic ahead of the Winter Olympics will also pose a risk to economic growth.

Australian Open

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The first Grand Slam of 2022 starts in Melbourne from today. A dramatic 10-day run-up ended on Sunday in the court that cleared the deportation of men’s No. 1 Novak Djokovic from Australia. The Serb’s contempt for Covid-19 vaccines cost him a possible 10th Australian Open title and a shot at a 21st Grand Slam – both would be records.

The exit of the most prominent player of the past decade opens up the singles competition to other favourites, led by Spain’s Rafael Nadal and Russian Daniil Medvedev.

Even in women’s competition, Serena Williams, the player who has won the most in the last decade, is not playing. 1 Ashleigh Barty’s win would make her the first Australian to win the tournament in 44 years. But the women’s singles hasn’t quite matched the clout of Nadal and Djokovic in recent years. Australian Open will set the tone for the rest of 2022: will we get more consistent winners this year?