July data indicates consumption may be stagnating amid Covid-19 crisis

High frequency indicators and analyst commentary suggest that July might have fewer positive surprises on the economic front.

Analysts have cut earnings estimates more sharply for consumption-oriented companies, even as many other indicators show signs of stagnation.

They have reduced earnings expectations by 8.8 per cent for the blue-chip Nifty50 index since the beginning of June. But the cuts are larger (11.4 per cent) for the Nifty India Consumption index, which tracks consumption-oriented companies. A less optimistic picture on consumption seems to have emerged in recent times with the sporadic resumption of lockdowns in many places, including Bengaluru, as Covid-19 cases rise.

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