Marking out the markets as coronavirus makes economic recovery uncertain

While coronavirus cases keep rising in India, there could be more lockdowns to contain the coronavirus as the economy sputters back to life. Devangshu Datta predicts where the markets could be headed

The economic outlook is hazy and investors don’t have a clear sense of market direction either as things stand. There’s consensus that gross domestic product (GDP) will contract substantially this fiscal, but estimates vary widely and there’s no visibility on the recovery timeline. ICRA, for example, assumes a 9.5 per cent contraction year-on-year for financial year 2020-21 (FY21) over FY20. Most commentators hope that agriculture will have a good year, countering contraction in services and manufacturing to some extent.
 
On the other hand, consumption is likely to be affected through the next six months, due to a rise in