It could be a tricky week with a lot of data flows. Here are some of the major triggers I see for the coming week.

· Nifty closed short of 15,000 and serious high-beta buying will come after that level is breached. The trend last week was a big rally in metals and caution in consumer stocks. With consumer stocks showing input cost pressures, that trend could continue.

· COVID cases are falling in urban Maharashtra but rural and semi-urban India is seeing a spike, so overall news is not too great. That is keeping FPIs on the side-lines as they again sold Rs.5,093 of equities in the first week.

· Big results this week include, Aarti Industries, BASF, Godrej Consumer, Asian Paints, Lupin, Tata Power, UPL, Piramal Enterprises, Cipla and Vedanta. In a show of support to the Nifty VIX has tapered sharply to the 20.82 levels.

· RBI’s Rs.50,000 crore package for COVID relief will drive sentiments and has built up hopes of a fiscal stimulus. It is hoped that the MSME rescue package could be a boost to MSMEs and exports. With trade deficit at $15 billion, trade data on Friday will be crucial.

· Copper prices have rallied to life-time highs, driven by supply limits and demand from electric cars. The rally in metals and minerals is likely to spike WPI inflation from 7.39% to 9%. WPI data on Friday will be keenly watched.

· The all-important CPI inflation and IIP will be announced on 12 May. CPI inflation is expected to taper from 5.52% to 4.2% while March IIP is anticipated to turn around from -3.6% to +17% on Mar-20 base effect. That could be good news.

· Key US data focus on US OPEC monthly, Redbook, API crude stocks, core CPI, jobless claims and retail sales. Focus will also be on Japan Household Spending, current account, M3, China CPI, UK GDP and global CFTC net positions.

In the quarter ended Mar-21, LIC has cut its stake overall in Indian companies. In fact, LIC’s shareholding slumped to a historic low of just about 3.66% of the market capitalization of all publicly traded companies. This was disclosed by Prime Database. That is not surprising because LIC has bene cutting exposure to equities since Jun-20. LIC holding in Indian companies had touched a record of 5% in 2012.

LIC still holds 76% of all insurance company holdings in Indian equities. The market value of its equity portfolio is about Rs724,000 crore or about $100 billion. Stocks like Bajaj Auto, Rail Vikas Nigam, Biocon, Aurobindo and Adani Total Gas saw a spike in LIC holdings. What is interesting is that even the MF holdings in Indian companies fell to 7.23%.

The second wave of pandemic has posed a major downside risk to economic activities in the April-June quarter and the lag effect could remain for a couple of quarters easily. Two of the major global rating agencies; Fitch Ratings and S&P Global Ratings, cut GDP forecasts. While Fitch has cut the FY22 GDP growth projection to 9.5%, in the case of S&P, it has downgraded from 11% to 9.8%. However, the good news is that tax collections are higher.

Some of the high frequency indicators are not too encouraging. Credit growth continued to remain muted at 5.3%. IIP and manufacturing have shown negative trends and could worsen once the base effect of 2020 weakens. Core sector for March was up 6.8% but that is largely base effect. In terms of overall performance of the economy, agriculture has been the silver lining with record foodgrain production, so a lot will depend on normal monsoons this year.

Due to more time offered by SEBI to announce results this quarter, only about 150 out of the NSE 500 companies have announced results till date. You can see that sales revenues are up 20.7% in the Mar-21 quarter with volumes and price support. Interestingly, the other income component is up 79% on a yoy basis. Even o sequential basis, the sales revenues are up by 13.7% so despite the pressures in March due to lockdowns, the top line is growing.

Let me turn to profits. Net profits overall are up 33.7% on a yoy basis and this is largely driven by a 11.4% fall in interest outgo due to a steep fall in the borrowing costs. That also partially offset higher input costs in most industries. It does look like profits peaked out in the Dec-20 quarter as net profit is down -3.8% on a sequential basis.

Any Berkshire AGM becomes a Warren Buffett affair and this time was no different. Here are some key takeaways from the Buffett AGM.

· When fund managers globally are over enthusiastic about buying equities, Buffett prefers to sit aide holding $145 billion in cash.

· Buffett still thinks that the best way is to invest in your own business so Berkshire has done $20 billion of buybacks in the last one year.

· Buffett felt he was right in exiting airlines a tad early. In his view, had he stayed invested in airlines, rescue package would not have come due to the backing of Berkshire.

· They are not too charitable about new-fangled ideas SPACS and Bitcoins, unless they make markets more meaningful.

· Buffett thinks SPACs force fund managers to deploy cash within 2 years while Bitcoins are still a haven for misuse. He is not comfortable with either.

· Buffett and Charlie are emphatic that Robin Hood platforms that offer free trades are just a recipe for people to gamble and lose their capital.

· Good old Buffett wisdom, management quality is still paramount. For long term investors, it is quality of management that matters more than anything else.

· There was little talk on succession. While Greg Abel is virtually the next in line, it is not clear when that would happen.

Let me look at the positives first. The surge in consumer goods demand which began in the Dec-20 quarter has continued. Results of companies with global franchises has been a lot better and immune to local cycles. Classic cases are Bajaj Auto, Infosys etc. One big positive you must keep in mind is that Indian companies made massive efficiency gains on costs, inventories, collection cycles etc. All these are good in the long run.

Now for the challenges. The next 2 quarters could bear the brunt of lockdowns and the impact on output. CMIE has pegged joblessness at 7.97% in Apr-20 and that is going to impact demand and purchasing power. Be cautious on these stocks. The first job for Indian companies is to get back to normal growth in next two quarters. A lot will depend on how the spread is arrested and vaccinations are done.

HDFC reported 42.43% growth in standalone profits at Rs.3,180 for the Mar-21 quarter. Even on a sequential basis, the profits were higher by 8.6%. HDFC also declared a final dividend of Rs.23 per equity share for FY21. In the previous year, HDFC had booked Rs.9,020 crore as gains from the sale of stake in GRUH Finance to Bandhan Bank.

Total revenues saw a minor 2% contraction to Rs.11,697 crore during the Mar-21 quarter. The all important NII or net interest income in the Q4 was up 14% at Rs.4,065 crore. The NIM or net interest margin stood at a healthy 3.5%. Its AUM stood at Rs5.70 trillion. Individual loan disbursements were up 60% on a yoy basis.

While gross NPAs of the individual portfolio stood at 0.99%, the non-individual portfolio gross NPAs stood at 4.77%, taking the overall average to 1.98%.