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    November starts on a positive note as pick up in business activity continues: Nomura

    Synopsis

    Nomura India Business Resumption Index (NIBRI) rose to yet another post-lockdown high of 85.8 for the week ended November 8, from 84.7 posted a week earlier, which was revised upwards from 84.4. Weekly tracker of indicators from mobility to labour participation had recorded 82.9 in the pre-lockdown week ended March 25.

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    The improvements in the latest figures were led by a sharp pick up in power demand by 7.5% after posting a 2.3% contraction a week earlier, Nomura said
    Business activity picked up further in the first week of November, carrying over the improvements seen across economic indicators in October, according to brokerage firm Nomura.

    The Nomura India Business Resumption Index (NIBRI) rose to yet another post-lockdown high of 85.8 for the week ended November 8, from 84.7 posted a week earlier, which was revised upwards from 84.4.

    The weekly tracker of indicators from mobility to labour participation had recorded 82.9 in the pre-lockdown week ended March 25.

    The improvements in the latest figures were led by a sharp pick up in power demand by 7.5% after posting a 2.3% contraction a week earlier, Nomura said in a note on Monday.

    "The positive start to the month was underpinned by the moderation in India’s pandemic curve, ongoing lockdown relaxations and festive demand."

    — Nomura


    The positive start to the month was underpinned by the moderation in India’s pandemic curve, ongoing lockdown relaxations and festive demand, it said.

    “If this trend persists over coming weeks, the outperformance in the monthly data in October available so far may continue into November,” Nomura said.

    While mobility indicators continued to improve, retail and recreational mobility, which had previously driven the rise in overall NIBRI, had moderated during the week while the Apple driving index plateaued from last week’s levels, it said.

    "If this trend persists over coming weeks, the outperformance in the monthly data in October available so far may continue into November"

    — Nomura


    A similar trend was seen in the labour participation rate shrinking to 40.2% from 41.2% a week earlier, it added.

    In order to assess the consistency of the uptick, Nomura would be tracking whether the pandemic curve remains in check after the festive season and whether the final momentum to demand persists beyond the festive season and pent-up demand phase.

    The Japanese brokerage would also monitor the likely impact of the government’s tighter fiscal policy on growth “as revenue shortfalls relative to budget will lead to expenditure compression, in our view.”

    4

    Controlling the spread
    India has tackled the Covid-19 crisis fairly well relative to its population with the number of actual cases 2.65 lakh lower than the estimated number of cases according to a State Bank of India (SBI) Research model based on data five months after the beginning of the unlock phase.

    States like Bihar and Jharkhand have managed the crisis well with a favourable difference between the two figures, the report released on Monday said.

    However, this trend was not consistent across the country with states like Karnataka, Tamil Nadu, Delhi and Maharashtra having a higher number of actual cases against the estimated figures, it said.

    A study of the data from 20 major states showed the estimated number of confirmed cases to be 84.5 lakh against the actual figure which stood at 81.8 lakh, indicating India had done a good job in controlling the spread of the virus, the report said.

    SBI Research estimated the pandemic to subside by February next year in India, but under the assumption that a second wave does not occur.



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    ( Originally published on Nov 09, 2020 )
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